Friday, May 02, 2014
Fatima Group's Midwest Fertilizer Bond Deal Will Be Largest Junk Bond Deal To Date
Ed Feigenbaum's Indiana Legislative Insight picks up an interesting observation from the Bond Buyer on that $1.26 billion bond issuance for Fatima Group's planned $2.4 billion fertilizer plant in Posey County by the Indiana Development Finance Authority that Gov. Mike Pence now says he backs after earlier withdrawing state support for the deal because of the parent company's connection to the sale of bomb-making materials to terrorists. "When it comes to market for long-term financing, the $1.26 billion bond deal is expected to be the largest junk-rated bond sale to date," the Bond Buyer reported. The Pakistani-based Fatima Group will invest $800 million of its own funds in Midwest Fertilizer and borrow up to another $400 million from other sources. Barnes & Thornburg is bond counsel on the deal. Gov. Pence switched his position on the bond issue after he said that he had been assured by the Pentagon that Fatima Group is taking precautions to help ensure that its products don't wind up in bombs used by terrorists to blow up American soldiers in the future.