K+S Sees Potash Prices Back at $400

Bloomberg reported that K+S, Europe’s biggest potash producer, is willing to stake its credit ratings on funding a new mine because it believes that potash prices will be rebounding back to $400 per ton.

According to Bloomberg:

A hybrid bond to raise one-third of the investment, or about $1.4 billion, for the Canadian project called Legacy is one option being considered, Chief Financial Officer Burkhard Lohr told analysts at a meeting yesterday. Lohr’s comments, reported in a Bernstein Research note today, were confirmed by Michael Wudonig, a spokesman at the Kassel, Germany-based potash producer.

Analysts from Bernstein Research cautioned investors:

Watch for a potential downgrade of debt status since Legacy will continue with more debt financing. How K+S sees the industry and how we differ.

Click here to view the full report.