CF Industries' $1.2 billion term loan said to rise in trading

A $1.2 billion term loan taken out by a unit of CF Industries Holdings Inc., the second-largest maker of nitrogen-based fertilizers, has risen in trading, according to a person familiar with the transaction.

The loan, sold at 99.5 cents on the dollar, was bid at 101.125 cents today, said the person, who declined to be identified because the trades are private. When the loan began trading, it was bid at 100.5.

The interest rate on the debt was set at 3 percentage points more than the London interbank offered rate, with a 1.5 percent Libor floor, Deerfield-based CF Industries said today in a regulatory filing. Libor is the rate banks charge to lend to each other.

The term loan was part of a financing to fund the takeover of Terra Industries Inc., according to an April 7 regulatory filing.

CF Industries also increased the size of its revolving credit facility to $500 million from $300 million, according to today's filing. The interest rate on the revolver was also 3 percentage points more than Libor, with a 1.5 percent Libor floor.

Morgan Stanley and Bank of Tokyo-Mitsubishi UFJ Ltd. were the lead arrangers on the borrowing.

Yara International Asa of Oslo is the largest fertilizer manufacturer.