Fitch Affirms CF Industries Holdings and CF Industries at 'BBB'; Outlook Stable

Fitch Ratings - New York - 13 Oct 2025: Fitch Ratings has affirmed CF Industries Holdings, Inc. and CF Industries, Inc. (collectively CF) Issuer Default Ratings (IDRs) at 'BBB'. Fitch has also affirmed the company's senior unsecured notes and RCF at 'BBB'. The Rating Outlook is Stable.

The ratings and Outlook primarily reflect Fitch's expectation that CF will maintain strong credit metrics and liquidity, supported by its leading North American scale, first-quartile cost position, supportive nitrogen fertilizer pricing, and robust cash generation, even as capital allocation pivots toward clean energy initiatives.

Key Rating Drivers

Shifting Capital Allocation to Clean Energy: CF's April 2025 decision to proceed with the Blue Point joint venture (JV) signals a pivot toward accelerated clean energy capex. Fitch estimates CF's share of the JV's construction costs at about $1.5 billion over the next three to four years. While partner contributions mitigate total cash outlays, CF's overall capex will remain elevated given additional growth projects. Fitch expects funding to come largely from operating cash flow and cash on hand, with share repurchases moderating from recent highs to accommodate investment.

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Accelerating Clean Energy Initiatives: CF holds a 40% stake and will operate the new JV with JERA Co., Inc. (35%) and Mitsui & Co., Ltd. (25%) to develop, supply, and offtake low-carbon ammonia at the Blue Point Complex in Louisiana. CF is also investing in decarbonization across its network and has recently completed a carbon capture and sequestration (CCS) project at Donaldsonville. Low-carbon (blue) ammonia, produced via CCS to materially reduce emissions versus conventional "grey" ammonia, could be accretive to profitability through a low-carbon pricing premium and 45Q tax credits, although the market remains in the early adoption stage.

Supportive Pricing, Cost Position Sustain Margins: Fitch expects CF's profitability to remain robust over the medium term, with EBITDA margins in the high-30% range, supported by its structural cost advantage. While ammonia prices are projected to soften modestly in 2026 as new capacity comes online, nitrogen fertilizer pricing should remain supportive of strong operating cash flow. Cash generation is supported by rising 45Q tax credits as the company begins operations at its recently completed CCS assets and advances additional projects.

Strong Financial Flexibility: CF maintains healthy leverage, projected at 1.5x-2.0x, and a historically strong FCF profile. Debt is manageable at roughly $3 billion following its 2022 deleveraging, with full availability under a $750 million revolver. FCF is underpinned by robust expected EBITDA and disciplined working capital management. Fitch expects accelerating capex to be largely funded by operating cash flow and existing liquidity. EBITDA interest coverage is projected to remain above 10x throughout the forecast period, supporting financial flexibility.

Size, Scale, Low Cost: CF is North America's largest nitrogen fertilizer producer and the world's largest ammonia producer, with eight plants in the U.S., two in Canada, and one in the U.K. In 2024, CF accounted for roughly 40% of North American ammonia capacity and 40% of granular urea capacity. The company benefits from U.S. shale gas, high capacity utilization, and an extensive logistics network, positioning it among the lowest-cost global producers.

Peer Analysis

CF's profitability profile compares strongly relative to fertilizer peers ICL Group Ltd. (BBB-/Stable), The Mosaic Company (BBB/Stable), and FMC Corporation (BBB-/Stable). CF's profitability is similar to that of OCP S.A. (BB+/Stable), a Moroccan state-owned phosphate fertilizer producer.

Liquidity And Debt Structure

CF demonstrates strong liquidity. As of June 30, 2025, CF had over $1.6 billion in cash on hand, and its $750 million unsecured revolver due 2030 was fully available.

Issuer Profile

CF is the world's largest ammonia producer and the largest nitrogen fertilizer producer in North America. Its operations are among the world's lowest-cost producers, given access to cost-advantaged natural gas.

References And Additional Information

For further details, visit Fitch Ratings.