8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): December 2, 2009

TERRA INDUSTRIES INC.

(Exact name of registrant as specified in its charter)

Maryland	1-8520	52-1145429
(State or other jurisdiction	(Commission File Number)	(IRS Employer
of incorporation)		Identification Number)

Terra Centre
600 Fourth Street, P.O. Box 6000
Sioux City, Iowa	51102-6000
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (712) 277-1340

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

EX-4.1

ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT

     On December 4, 2009, Terra Capital, Inc. (“Terra Capital”), a subsidiary of Terra Industries Inc. (“Terra”), Terra LP Holdings LLC (the “New Guarantor”), each other then existing guarantor under the Indenture (as hereinafter defined) (the “Existing Guarantors”), and U.S. Bank National Association, as trustee (the “Trustee”), entered into a supplemental indenture (the “First Supplemental Indenture”), supplementing the Indenture dated October 26, 2009 (as amended, supplemented, waived or otherwise modified, the “Indenture”), among Terra Capital, Terra, the Existing Guarantors and the Trustee, pursuant to which Terra Capital issued 7.75% Senior Notes due 2019 (the “Notes”). Pursuant to the First Supplemental Indenture, the New Guarantor became a guarantor of Terra Capital’s obligations under the Notes.

     The New Guarantor is also joining the Amended and Restated Pledge and Security Agreement dated as of October 10, 2001 by Terra Capital and certain of its affiliates as grantors in favor of Citicorp USA, Inc., as agent for the secured parties referred to therein. In addition, the New Guarantor also agreed to be bound as a guarantor for purposes of (1) the Guaranty dated as of October 10, 2001, among Terra and certain of its subsidiaries listed on the signature pages thereof and acknowledged by Citicorp USA Inc., as administrative agent, and (2) the Guaranty dated as of December 21, 2004, among Terra Nitrogen, Limited Partnership and Terra Nitrogen Company, L.P., and certain of its subsidiaries listed on the signature pages thereof and acknowledged by Citicorp USA Inc., as administrative agent.

     A copy of the First Supplemental Indenture is attached as Exhibit 4.1 to this Current Report on Form 8-K and is incorporated by reference herein. The description of the material terms of the First Supplemental Indenture is qualified in its entirety by reference to such exhibit.

ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS

(d) Exhibit

4.1 First Supplemental Indenture, dated December 4, 2009, by and among Terra Capital, Inc., Terra Industries Inc., Terra LP Holdings LLC, the existing guarantors named therein and U.S. Bank National Association, as trustee.

SIGNATURES

          Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

TERRA INDUSTRIES INC.
By:	/s/ John W. Huey
Name:		John W. Huey
Title:		Vice President, General Counsel and Corporate Secretary

Date: December 8, 2009

EXHIBIT INDEX

Exhibit No.	Description
4.1	First Supplemental Indenture, dated December 4, 2009, by and among Terra Capital, Inc., Terra Industries Inc., Terra LP Holdings LLC, the existing guarantors named therein and U.S. Bank National Association, as trustee.

EX-4.1

Exhibit 4.1

EXECUTION COPY

FIRST SUPPLEMENTAL INDENTURE

          The First Supplemental Indenture (the “First Supplemental Indenture”) is made and entered into this December 4, 2009, by and among Terra Capital, Inc., a Delaware corporation (the “Company”), Terra Industries Inc., a Maryland corporation, as parent guarantor (the “Parent”), each of the subsidiaries of the Company listed in Appendix I attached hereto (each, together with the Parent, the “Existing Guarantors”), Terra LP Holdings LLC (the “New Guarantor”) and U.S. Bank National Association, as trustee under the Indenture referred to below (the “Trustee”).

W I T N E S S E T H

          WHEREAS Terra Capital, Inc. (the “Company”), Terra Industries Inc., a Maryland corporation (“Parent”), certain of Parent’s subsidiaries and U.S. Bank National Association, as trustee, are parties to an Indenture (as such may be amended from time to time, the “Indenture”), dated as of October 26, 2009, relating to the Company’s 7.75% Senior Notes due 2019 (the “Notes”);

          WHEREAS Section 4.5 and Section 10.7 of the Indenture require the Company to cause each new Restricted Subsidiary (other than any Foreign Subsidiary) to execute and deliver to the Trustee a supplemental indenture pursuant to which such Restricted Subsidiary shall unconditionally guarantee all of the Company’s obligations under the Indenture and the Notes;

          WHEREAS pursuant to Section 9.1 of the Indenture, the Company and the Trustee can execute the First Supplemental Indenture without consent of holders.

          NOW, THEREFORE, for good and valuable consideration, the receipt of which is acknowledged, the undersigned hereby agrees to guarantee the Company’s obligations under the Notes on the terms and subject to the conditions set forth in Article 10 of the Indenture. From and after the date hereof, the undersigned shall be a Guarantor for all purposes under the Indenture and the Notes as follows:

          1. Capitalized Terms. Capitalized terms used herein without definition shall have the meanings assigned to them in the Indenture.

          2. Agreement to Guarantee. The New Guarantor hereby agrees to guarantee the Company’s obligations under the Notes on the terms and subject to the conditions set forth in Article 10 of the Indenture. From and after the date hereof, the New Guarantor shall be a Guarantor for all purposes under the Indenture and the Notes.

          3. Incorporation of Terms of Indenture. The obligations of the New Guarantor under the Guarantee shall be governed in all respects by the terms of the Indenture and shall constitute a Guarantee thereunder. The New Guarantor shall be bound by the terms of the Indenture as they relate to the Guarantee.

          4. No Personal Liability of Directors, Officers, Employees or Stockholders. No director, officer, employee, member or stockholder of the New Guarantor, as such, will have any liability for any obligations of the Company, any Existing Guarantor or the New Guarantor under the Notes, the Indenture, the Guarantees, or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of Notes by accepting a Note waives and releases the Company, each Existing Guarantor and the New Guarantor from all such liability. The waiver and release are part of the consideration for issuance of the Guarantee by the New Guarantor.

          5. GOVERNING LAW. THE FIRST SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE CONFLICTS OF LAWS PRINCIPLES THEREOF.

          6. Counterparts. The First Supplemental Indenture may be executed in any number of counterparts, each of which shall be deemed an original; but all such counterparts shall together constitute but one and the same instrument.

          7. Effect of Headings. The Section headings herein are for convenience only and shall not affect the construction hereof.

          8. Trustee. The recitals contained herein shall be taken as the statements of the Company, the Existing Guarantors and the New Guarantor, and the Trustee assumes no responsibility for their correctness.

2

          IN WITNESS WHEREOF, the undersigned have caused this First Supplemental Indenture to be duly executed as of the date above written.

TERRA CAPITAL, INC.
By: Name:	/s/ John W. Huey    John W. Huey
Title:	Vice President and Corporate Secretary
TERRA INDUSTRIES INC.
By: Name:	/s/ John W. Huey    John W. Huey
Title:	Vice President, General Counsel and     Corporate Secretary

BEAUMONT AMMONIA INC. BEAUMONT HOLDINGS CORPORATION BMC HOLDINGS INC. PORT NEAL CORPORATION TERRA CAPITAL HOLDINGS, INC. TERRA ENVIRONMENTAL TECHNOLOGIES INC. TERRA GLOBAL HOLDING COMPANY INC. TERRA INTERNATIONAL, INC. TERRA INTERNATIONAL (OKLAHOMA) INC. TERRA INVESTMENT FUND LLC TERRA INVESTMENT FUND II LLC TERRA METHANOL CORPORATION TERRA NITROGEN CORPORATION TERRA REAL ESTATE CORPORATION TERRA (U.K.) HOLDINGS INC. TERRA MISSISSIPPI HOLDINGS CORP. TERRA MISSISSIPPI NITROGEN, INC. TERRA HOUSTON AMMONIA, INC. TERRA NITROGEN GP HOLDINGS INC.
By:	/s/ John W. Huey
Name:	John W. Huey
Title:	Acting in the capacities identified on Appendix I hereto with respect to each of the Existing Guarantors

TERRA LP HOLDINGS LLC
By:	/s/ John W. Huey
	Name:	John W. Huey
	Title:	Vice President and Corporate Secretary

U.S. Bank National Association, as Trustee
By:	/s/ Richard Prokosch
	Name:	Richard Prokosch
	Title:	Vice President

APPENDIX I

Subsidiaries of the Company	Position of John W. Huey
Beaumont Ammonia Inc.	Vice President and Corporate Secretary
Beaumont Holdings Corporation	Vice President and Corporate Secretary
BMC Holdings Inc.	Vice President and Corporate Secretary
Port Neal Corporation	Vice President and Corporate Secretary
Terra Capital Holdings, Inc.	Vice President and Corporate Secretary
Terra Environmental Technologies Inc.	Vice President and Corporate Secretary
Terra Global Holding Company Inc.	Vice President and Corporate Secretary
Terra International, Inc.	Vice President and Corporate Secretary
Terra International (Oklahoma) Inc.	Vice President, General Counsel and Corporate Secretary
Terra Investment Fund LLC	Vice President and Corporate Secretary
Terra Investment Fund II LLC	Vice President and Corporate Secretary
Terra Methanol Corporation	Vice President and Corporate Secretary
Terra Nitrogen Corporation	Vice President and Corporate Secretary
Terra Real Estate Corporation	Vice President and Corporate Secretary
Terra (U.K.) Holdings Inc.	Vice President, General Counsel and Corporate Secretary
Terra Mississippi Holdings Corp.	Vice President
Terra Mississippi Nitrogen, Inc.	Vice President and Corporate Secretary
Terra Houston Ammonia, Inc.	Vice President, General Counsel and Corporate Secretary
Terra Nitrogen GP Holdings Inc.	Vice President and Corporate Secretary