S&P: withdraws rating on AWB Ltd. After Agrium acquisition

(The following was released by the rating agency)

Dec. 3, 2010–Standard and Poor’s Rating Services today
that it had withdrawn its corporate credit and debt issue
ratings on AWB Ltd. and AWB Harvest Finance Ltd. following the
completion of Agrium Inc.’s (BBB/Stable/–) A$1,238 million
acquisition of AWB Ltd. The ratings were withdrawn at the
request of the company.

Before the withdrawal, we raised the long-term rating on
AWB to ‘BBB’, from ‘BBB-‘, and assigned a stable outlook; the
ratings on AWB were removed from CreditWatch with positive
implications, where they were placed on Aug. 25, 2010. The
upgrade reflected our view that Agrium’s investment in AWB is
core and strategic to its international crop-input sourcing
capabilities. The ‘A’ long-term and ‘A-1’ short-term ratings
on AWB Harvest Finance Ltd. were unchanged before the
withdrawal and remained on CreditWatch with negative
implications. This reflected our view that we do not have
adequate visibility on Agrium’s long-term strategic intentions
for the wheat-pool funding activities previously undertaken by
this entity. We understand that Agrium will be arranging
funding facilities to accommodate the forthcoming 2010/2011
Australian wheat harvest and wheat-pool products.

Meantime, the ‘BBB-‘ debt issue rating on AWB Commercial
Funding Ltd. was also raised to ‘BBB’, from ‘BBB-‘, and
subsequently withdrawn at the request of the company.

The ratings on Agrium reflect our opinion of the company’s
good diversity, competitive cost structure relative to its
North American peers, and history of good cash flow
generation. These strengths are partially offset, in our
opinion, by the company’s participation in the cyclical
fertilizer industry and exposure to the fragmented and highly
volatile nitrogen and phosphate markets.

S&P: withdraws rating on AWB Ltd. After Agrium acquisition