Fitch Places Mosaic's 'BB-' IDR on Rating Watch Evolving

Business Wire, July 21, 2006

CHICAGO -- Fitch Ratings has placed the following credit ratings of The Mosaic Company (Mosaic), Mosaic Global Holdings, and Phosphate Acquisition Partnership LP, on Rating Watch Evolving.

Mosaic

--Issuer Default Rating (IDR) 'BB-';

--Senior secured revolving credit facility 'BB '.

Mosaic Global Holdings Inc.

--Issuer Default Rating (IDR) 'BB-';

--Senior secured term loans A and B 'BB ';

--Senior unsecured debt with subsidiary guarantees 'BB';

--Senior unsecured debt without subsidiary guarantees 'BB-'.

Phosphate Acquisition Partnership LP

--Issuer Default Rating (IDR) 'BB-';

--Senior secured notes 'BB-'.

Fitch has also withdrawn the rating on Mosaic's mandatory convertible preferred securities.

The ratings reflect Mosaic's good market positions in the global potash and phosphate markets; improving financial performance; and high debt level. Mosaic's debt level stood at nearly $2.7 billion at the end of February 2006. For the trailing 12-month (TTM) period ended Feb. 28, 2006, Mosaic's total debt-to-EBITDA was 3.4 times (x) and its EBITDA-to-interest incurred was 4.6x.

The Rating Watch Evolving reflects the possibility of a change in capital structure near-term as a result of the credit agreement's 2008 senior notes refinancing condition. The senior notes are defined as the 10-7/8% senior notes due 2008 and Phosphate Acquisition Partnership's 7% senior notes due 2008; together these notes total approximately $550 million. The 2008 Senior Notes Refinancing Condition states that all credit facilities will mature on Nov. 30, 2007 if one of the following conditions has not been met and the Refinancing Condition has not been waived:

--The 2008 Senior Notes must be repurchase or redeemed or refinanced such that no more than $100 million of the notes are outstanding on Nov. 30, 2007; or

--Mosaic's leverage is less than 2.5x as of Nov. 30, 2007; or

--Prior to Nov. 30, 2007, all obligations under the credit agreement have been paid in full.

Mosaic has not been able to consistently generate free cash flow for debt reduction since the combination in October 2004. Without free cash flow to repay the necessary obligations, Mosaic could need to refinance at least $450 million of the senior notes before the end of November 2007. While such a refinancing could be successful, the extension of the maturity provides no permanent relief to leverage. Moreover, the ratings of certain issues could change depending upon how a refinancing is executed, specifically how collateral or guarantees may change. If Mosaic could not satisfy any of the options outlined in the 2008 Senior Notes Refinancing Condition and its lenders would not grant a waiver, Mosaic would be in default under its credit agreement and cross-acceleration and cross-default provisions in certain bond indentures may apply. The Rating Watch Evolving will be resolved once the 2008 Senior Notes Refinancing Condition is resolved.

The Mosaic Company is one of the largest global suppliers of phosphate and potash fertilizers. Mosaic earned approximately $784.2 million in EBITDA on $5.4 billion in revenue TTM Feb. 28, 2006; the company had $2.7 billion in debt at that time.

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