Ratings Assigned: Agrium Inc.Senior Unsecured Rating of Baa2

Senior Unsecured Shelf (foreign currency) Rating of (P)Baa2

RATINGS RATIONALE

The Baa2 ratings reflect the ample liquidity and capital resources Agrium has maintained as a result of robust fertilizer supply/demand fundamentals. Agrium's diverse business mix, including the large retail network of over 1,200 facilities in the United States, Australia, South America, and Canada provides a stable flow of cash as well as extensive logistical network. Further supporting the rating are Agrium's strong credit metrics including retained cash flow to debt of 56.9%, EBITDA / Interest 12.6x, and debt / EBITDA of 1.3x (ratios include Moody's Standard Adjustments).

The rating outlook is stable in light of robust industry conditions and anticipated strong retained cash flow generation. While we anticipate an increase in capital expenditures, Moody's believes that Agrium will maintain its historically conservative financial policies. Despite the prospect of an improving agricultural environment in 2011 and beyond there are several considerations weighing on a positive rating move. Two concerns focus on Agrium's willingness to consider large debt financed acquisitions including the ensuing integration efforts, and the possibility of future cash commitments associated with strategic joint venture opportunities. In the event that Agrium exceeds our expectations for cash generation and debt reduction, we would consider a rating upgrade if debt-to-EBITDA was no higher than 2.0x on a sustainable multi-year basis and management publicly supported a goal of a Baa1 rating. There is limited downward pressure at the current time. However, should the company pursue a larger than expected number of purely debt financed acquisitions (an event that is deemed unlikely) a rating downgrade may be warranted. Also, should the global agricultural industry unexpectedly deteriorate, negative ratings pressure could develop as a result of depressed cash flow and earnings metrics especially if retained cash flow-to-debt were to drop below 20% or if debt-to-EBITDA were to exceed 3.0x.

The principal methodology used in rating Agrium was Moody's Global Chemical Industry rating methodology, published in December 2009. Please see the Credit Policy page on www.moodys.com for a copy of this methodology.

Agrium Inc., headquartered in Calgary, Alberta, Canada, is a leading global producer and marketer of agricultural nutrients and industrial products and a major retail supplier of agricultural products and services in both North and South America. Agrium produces and markets three primary groups of nutrients: nitrogen, phosphate and potash as well as controlled release fertilizers and micronutrients. Agrium reported sales of US$16.8 billion for the last 12 months ending June 30, 2012.

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