Financing Arrangements Financing Arrangements

3 Months Ended

Mar. 31, 2020

Financing Arrangements [Abstract]

Schedule of Debt [Table Text Block]

9. Financing Arrangements

Structured Accounts Payable Arrangements

In Brazil, we finance some of our potash-based fertilizer, sulfur, ammonia and other raw material product purchases through third-party financing arrangements. These arrangements provide that the third-party intermediary advance the amount of the scheduled payment to the vendor, less an appropriate discount, at a scheduled payment date and Mosaic makes payment to the third-party intermediary at a later date, stipulated in accordance with the commercial terms negotiated. As of March 31, 2020 and December 31, 2019, the total structured accounts payable arrangements were $502.0 million and $740.6 million, respectively.

Inventory Financing Arrangement

On January 7, 2020, we entered into an inventory financing arrangement with a bank to sell up to $400 million of certain commodities inventory for cash and subsequently repurchase the inventory at an agreed upon price and time in the future, not to

exceed 180 days. Under the terms of the agreement, we may borrow up to 90% of the value of the inventory. It is later repurchased by Mosaic at the original sale price plus interest and any transaction costs. As of March 31, 2020, we had sold $350.3 million of inventory under this arrangement, which is included in short-term debt on the Condensed Consolidated Balance Sheet. The inventory remains on our Condensed Consolidated Balance Sheet as it serves as collateral for the debt. Interest accrues on the debt through the repurchase date, and is included in accrued liabilities. The weighted average interest rate of the repurchase obligation as of March 31, 2020 was 2.11%.

Receivable Purchasing Arrangement

On March 4, 2020, we entered into a Receivable Purchasing Agreement ("RPA"), with a bank whereby, from time-to-time, we sell certain receivables. The net face value of the purchased receivables may not exceed $150 million at any point in time. The purchase price of the receivable sold under the RPA is the face value of the receivable less a discount of 70 basis points over a designated reference rate (LIBOR or Canadian Dollar Offered Rate). We record the purchase price as short-term debt, and recognize interest expense by accreting the liability through the due date of the underlying receivables. As of March 31, 2020, we had non-recourse short-term debt of $101.5 million related to the RPA. Following the sale to the bank, we continue to service the collection of the receivables on behalf of the bank without further consideration. The weighted average interest rate of the RPA related debt as of March 31, 2020 was 1.47%.