Owners of an Indiana fertilizer project aren’t quite ready to issue long term debt for the project so will remarket nearly $1.3 billion of tax-exempt debt.

CHICAGO — The developers of an Indiana fertilizer plant will remarket $1.26 billion of debt as they continue trying to finalize project details they have to nail down before they can roll the securities into a long-term structure.

Posey County, Indiana will remarket the economic development revenue refunding debt on behalf of the Midwest Fertilizer Co. LLC this week. The transaction features a mandatory tender with an extended termination date of Aug. 2, 2016. The bonds, after they are rolled into a long-term structure, will mature in 2046.

Citi and Guggenheim Securities are remarketing agents.

It's expected to be one of the largest junk-rated private activity deals ever when the notes are ultimately rolled over into long-term debt, slightly exceeding the $1.2 billion of debt issued for a fertilizer plant in Iowa.

Midwest Fertilizer, owned by Fatima Group, one of Pakistan's largest conglomerates, owns the planned nitrogen fertilizer manufacturing facility.

The state, through the Indiana Finance Authority, originally issued nearly $1.3 billion of tax-exempt debt for the project in December 2012, pushing short term notes to market to beat the expiration date of the federal government’s Midwestern Disaster Area Bond program, which authorized the private activity bonds.

Officials said at the time they expected to refinance the notes into long-term debt before a July 1, 2013 mandatory tender date, but finalizing contracts and other pieces of the project has taken longer than expected. That’s led to a series of remarketings even though officials have said each was expected to be the last.

The offering statement highlights “project milestones” since the last remarketing in April that carried a November 2015 tender. It cites completion of an engineering, procurement, and construction contract expected to be finalized in November. The company said it is “near completion of a fertilizer off-take contract, providing an extensive Midwest distribution network.”

Posey County revised its $144 million tax incentive package, approving tax increment and special assessment bonds, a portion of which will fund project costs and a portion of which will finance a bypass road, the offering statement said. The company reported adding $13 million to its contribution.

At first, the project ran into political opposition. Indiana in early 2013 dropped its support for the project after U.S. defense officials raised concerns about the use of Fatima's fertilizer product in explosive devices deployed against American soldiers in Afghanistan and Pakistan.

Gov. Mike Pence, just a day after taking office, halted the project in January 2013 and formally dropped all state support in mid-May.

The company scrambled to arrange a new deal with Posey County, site of the proposed plant, getting the county to step in as the conduit issuer.

In April 2014, just a few days after the third refinancing, Pence said Fatima had addressed some of the U.S.'s concerns by making its products less explosive, and said he would reopen talks with the company. In January, the company dropped its efforts to secure a state incentive package, according to offering documents.

The project is expected to carry a final price tag of nearly $2.8 billion, up from prior estimates of $2.55 billion. In addition to the $1.3 billion of bonds and at least $144 million in incentives from the county, the company expects to borrow up to $400 million and Fatima and other partners will kick in up to $900 million in equity, according to bond documents.

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