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Agricultural products supplier Agrium Inc. (AGU - Analyst Report) will issue and sell debentures worth $1 billion, comprising $500 million aggregate principal amount of 3.5% debentures due Jun 1, 2023, and $500 million aggregate principal amount of 4.9% debentures due Jun 1, 2043. The debentures are registered under the multi-jurisdictional disclosure system in Canada and the U.S. Issuance and sales of the debentures will be restricted only in the U.S.

Agrium plans to utilize a part of the proceeds from the offering to fund its expected capital spendings, pending which, it may be used for general corporate purposes and cut debt under its short-term credit facilities.

Merrill Lynch, Pierce, Fenner & Smith Incorporated, a wholly-owned subsidiary of Bank of America Corporation (BAC - Analyst Report); RBC Capital Markets, LLC, the corporate and investment banking arm of the Royal Bank of Canada (RY - Snapshot Report), and Scotia Capital (USA) Inc, an affiliate to The Bank of Nova Scotia (BNS - Snapshot Report), are acting as joint book-running managers for the debenture offering.

The necessary documents including preliminary prospectus supplement and the Agrium’s related effective Registration Statement on Form F-10 associated with the debentures offering has been filed with the Canadian securities regulatory authorities in Canada and the U.S. Securities and Exchange Commission under the multi-jurisdictional disclosure system. The final prospectus is yet to be filed with the same authorities in both the countries.

Agrium reported its first-quarter 2013 results on May 9. The company reported earnings of 94 cents, missing the Zacks Consensus Estimate of $1.07 and were below 97 cents earned in the year ago quarter. Profit dipped 9% year over year to $141 million, hurt by lower sales.

Revenues fell roughly 9.7% year over year to $3,224 million in the reported quarter, also missing the Zacks Consensus Estimate of $3,491 million. Lower sales in the Retail segment led to the decline in sales.

Agrium expects strong demand for crop inputs in 2013 as farmers seek to increase crop yields through utilizing top seed genetics, crop protection products, and crop nutrients. Demand for crop protection products, primarily fungicides, is expected to improve in 2013 under more normal growing conditions. Agrium believes that farmers will continue to seek high-quality products, services, and expertise to boost yield and productivity in coming years.

Agrium currently retains a Zacks Rank #4 (Sell).
 

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