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Agribusinesses and Agricultural Cooperatives

Corporate Agribusiness

As the nation’s largest cooperative enterprise, CHS is used to doing things on a significant scale. The company generates over $35 billion in annual revenues, employs over 12,500 people in 25 countries and markets over 50 million metric tons of grain annually.

Headquartered in Inver Grove Heights, Minnesota, CHS also supplies member cooperatives with 3 billion gallons of gas and diesel each year, along with crop nutrients delivered through over 500 retail locations.

In 2015, CHS undertook yet another typically ambitious business initiative: a $2.8 billion strategic investment in a joint venture with CF Industries, one of the world’s biggest nitrogen fertilizer companies. CHS President and CEO Carl Casale calls the investment a “game changer” for the co-op. “This positions CHS and our owners for long-term dependable fertilizer supply, supply chain efficiency and economic value,” Casale says.

To help finance the investment, CHS turned to CoBank, with whom it has a decades-long lending relationship. The bank put together a $3.6 billion financing package, including a $600 million term loan placed entirely in the Farm Credit System, as well as a $3 billion broadly syndicated revolving line of credit that will provide liquidity for the co-op over the next five years. CoBank’s ability to syndicate the loan package to both commercial banks and partner organizations in the Farm Credit System provided it with the capacity to meet the co-op’s significant borrowing needs.

In addition to capacity, speed was also a critical success factor for the financing, said Jamey Grafing, vice president and corporate treasurer for CHS. “We went to CoBank in confidence and said, ‘Here’s the opportunity, but we need to move quickly,’” says Grafing. “Because CoBank understood our business, we knew that they would be able to get the deal done in a very compressed window.”

“CoBank’s large balance sheet and capital markets relationships are big advantages when handling a transaction of this size,” says Jonathan Logan, executive vice president of CoBank’s Corporate Agribusiness Banking Group. “We look forward to seeing the value this strategic transaction delivers for CHS’ members over the long term.”

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