Terra Industries Inc. will prepay on June 3, 2005 the remaining $75 million of its term loan due 2008. This action will result in a 2005 second quarter charge for loss on debt prepayment of approximately $15 million.
In a related matter, Terra shareholders approved management's proposal to redeem the Series B Preferred Shares that have been and may be issued in connection with the Mississippi Chemical transaction with the issuance of up to 2.1 million common shares.

Said Terra President and CEO Michael L. Bennett, "This prepayment reduces Terra's outstanding debt balance to its lowest level since 1994, and reflects our commitment to reducing our leverage to strengthen Terra for the long-term."

Terra Industries Inc., with 2004 revenues of $1.9 billion pro forma the Mississippi Chemical acquisition, is a leading international producer of nitrogen products.

Source: Company Release