Rio Tinto tenders for $3 billion of 2018, 2020, 2021 and 2022 notes

By Susanna Moon

Chicago, June 7 – Rio Tinto plc and Rio Tinto Ltd. announced cash tender offers for up to $3 billion of its 2018, 2020, 2021 and 2022 dollar-denominated notes by Rio Tinto Finance (USA) plc and Rio Tinto Finance (USA) Ltd.

The offers will consist of a tender for any and all of two series of notes and a tender for up to a maximum amount of five other series, according to a company announcement.

In the any-and-all offer, pricing will be set at 11 a.m. ET on June 13 for the following notes using the 0.875% U.S. Treasury notes due May 31, 2018 plus a fixed spread of 50 basis points:

• $1,669,802,000 of 6.5% notes due 2018 issued by Rio Tinto Finance (USA) Ltd.; and

• $1,189,523,000 of 2.25% notes due 2018 issued by Rio Tinto Finance (USA) plc.

The offer will end at 5 p.m. ET on June 13.

Holders will also receive accrued interest with settlement expected to occur on June 14.

In the maximum tender offer, the companies are offering to purchase for cash an aggregate principal amount of up to $3 billion less the amount of notes purchased in the any-and-all offer.

Pricing in the maximum offers will be set at 11 a.m. ET on June 21 using 1.375% U.S. Treasury notes due May 31, 2021 plus a fixed spread as follows:

• $1 billion of 3.5% notes due 2020 issued by Rio Tinto Finance (USA) Ltd. with acceptance priority of 1 and pricing using a spread of 65 bps;

• $1 billion of 4.125% notes due 2021 issued by Rio Tinto Finance (USA) Ltd. with acceptance priority of 2 and pricing using a spread of 92 bps;

• $1.15 billion of 3.75% notes due 2021 issued by Rio Tinto Finance (USA) Ltd. with acceptance priority of 2 and pricing using a spread of 98 bps;

• $1 billion of 3.5% notes due 2022 issued by Rio Tinto Finance (USA) plc with acceptance priority of 3 and pricing using a spread of 140 bps; and

• $1 billion of 2.875% notes due 2022 issued by Rio Tinto Finance (USA) plc with acceptance priority of 3 and pricing using a spread of 140 bps.

The total purchase price will include an early tender premium of $30 for each $1,000 principal amount tendered by 5 p.m. ET on June 20, the early tender date.

The maximum tender offer will remain open until 11:59 p.m. ET on July 5.

Holders who tender their notes after the early deadline will receive the total amount less the early premium.

Holders will also receive accrued interest.

Settlement could be as early as June 22 for early tendered notes, with remaining tenders settled on July 6.

The lead dealer managers are Citigroup Global Markets Ltd. (800 558-3745, 212 723-6106, +44 0 20 7986 8969), HSBC Securities (USA) Inc. (888 HSBC-4LM, 212 525-5552 or +44 0 20 7992 6237), J.P. Morgan Securities LLC (866 834-4666, 212 834-3424 or +44 0 20 7134 2468) and MUFG (877 744-4532, 212 405-7481 or +44 0 20 7577 4048/4218). The co-dealer managers are Natixis Securities Americas LLC, RBS Securities Inc., Santander Investment Securities Inc. and Standard Chartered Bank.

The depositary and information agent is Global Bondholder Services Corp. (866 470-3800 or 212 430-3774 or gbsc-usa.com/RioTinto).

The offers are part of the Rio Tinto Group's ongoing capital management and follows the successful completion of cash tender offers launched in April to purchase $1.5 billion of its 2017 and 2018 notes.

Rio Tinto is a mining group based in London.

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