Fitch Upgrades Mosaic's IDR to 'BBB'; Outlook Stable

Business Wire, June 3, 2008

CHICAGO -- Fitch has upgraded the following ratings of The Mosaic Company (Mosaic) and its subsidiaries, with a Stable Outlook:

The Mosaic Company

-- Issuer Default Rating (IDR) to 'BBB' from 'BB ';

-- Senior secured revolver to 'BBB ' from 'BBB-';

-- Senior secured term loan to 'BBB ' from 'BBB-';

-- Senior unsecured notes to 'BBB' from 'BB '.

Mosaic Global Holdings

-- IDR to 'BBB' from 'BB ';

-- Senior unsecured notes and debentures to 'BBB' from 'BB '.

The ratings for Phosphate Acquisition Partners LP and Mosaic Colonsay ULC are withdrawn, as no material indebtedness remains outstanding.

The worldwide demand for wheat, soybeans and corn, working its way back through the supply chain, has increased the demand for phosphate and potassium based fertilizers. This increased demand has combined with a weak U.S. dollar to produce strong revenues for Mosaic. In year-over-year comparisons of average product prices in the company's third quarter, the prices for diammonium phosphate almost doubled while muriate of potash jumped 53%. Revenues for the first nine months increased 55% year over year, operating profits before taxes soared more than six-fold, and fertilizer prices are even higher on current spot markets. Mosaic has put these fortunes to good use, reducing debt by $707 million over the first nine months of its current fiscal year while increasing cash by $714 million.

A poor start to the spring growing season (wet weather) may push the sales of some product into the fall, but nothing is likely to stand in the way of increased near-term profits and cash flow. The next headwinds, if they appear, may come in 2010 when increased production capacities come on-stream in the Middle East, Canada, Belarus and Russia - these could deflate prices. However, what has already occurred will likely not be undone, and Mosaic is using a portion of its cash flow to reinvest in its competitive positions through low-cost production. By the end of Mosaic's fiscal 2009, Fitch projects that the company will have accumulated cash reserves in excess of $3 billion.

Cargill, Incorporated (Cargill and Mosaic's 64% shareowner) has seen its investment grow more than three and one-half times over the past year. So far Cargill has made no moves to capitalize on its investment. Mosaic supplies Cargill a small amount of fertilizer, and the companies are linked in a few marketing ventures. In late October 2008, standstill provisions will expire, and Cargill will be free to petition for increased Board membership. In and of itself this will not warrant a change in Mosaic's debt ratings. However, moves to monetize Cargill's investment through the use of leverage in Mosaic's capital structure would have ratings' implications.

Mosaic is the No. 1 producer of phosphate fertilizers and the No. 2 producer of potassium based fertilizers in the world. Mosaic earned approximately $2.37 billion in operating EBITDA on $8.03 billion in sales over the latest 12 months ending Feb. 29, 2008; the company had $1.65 billion in debt and $1.13 billion in cash at that time.

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