S&P Global Ratings Outlook Revision for The Mosaic Co.
S&P Global Ratings revised its outlook on The Mosaic Co. (NYSE:MOS) from stable to negative on 6 August 2026, while affirming the company’s BBB issuer credit rating. The agency indicated that funds from operations to debt (FOD) are expected to fall below the 20 % trigger in 2026, down from the 30 % downside trigger previously referenced, reflecting pressure from elevated sulfur and ammonia input costs that are compressing margins in the phosphate segment.
Adjusted EBITDA is projected to decline sharply to approximately $1.6 billion for 2026, compared with $2.6 billion in 2025. The decline is attributed to an acute shortage of sulfur sourced from the Persian Gulf—accounting for roughly 50 % of global traded sulfur supply—and rising ammonia prices. Spot sulfur prices have risen above $1,000 per ton, while ammonia has exceeded $600 per ton, rendering incremental phosphate stripping margins uneconomic and prompting Mosaic to curtail marginal production.
The effective closure of the Strait of Hormuz and a subsequent dip in global exports initially lifted phosphate prices in the first half of 2026. However, near‑record fertilizer unaffordability and weak crop pricing have depressed demand, as farmers defer purchases. This has prevented further price increases and reduced both North American and global phosphate shipments. Management forecasts phosphate application to fall by about 30 % in Brazil and North America.
S&P expects discretionary cash flow to register a deficit of $400 million to $500 million in 2026, which will increase Mosaic’s debt load before turning modestly positive in 2027. The negative free cash flow stems from weak earnings and heightened maintenance and reliability expenditures in the phosphate segment, where capital expenditures of $423 million through June outpaced EBITDA of $243 million. Earlier in the year, Mosaic lowered its 2026 capex guidance by $250 million.
As of 30 June 2026, Mosaic reported approximately $1 billion of short‑term debt, comprising $519 million of commercial paper and $500 million of inventory financing. In the second quarter, the company issued a $1 billion delayed‑draw term loan to refinance roughly $500 million of commercial paper. Upcoming debt maturities include $700 million in 2027, $547 million in 2028, and an additional $500 million due before 2029.