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Fortescue Resources withdraws term loan maturity extension proposal
By Sara Rosenberg
New York, March 18 – Fortescue Resources pulled from market the proposed extension of its $4,888,000,000 senior secured term loan to December 2021 from June 30, 2019, according to a market source.
The extended term loan was talked at Libor plus 450 basis points with a 1% Libor floor and had 101 soft call protection for one year.
Earlier in the process, the request was changed from extending the loan to 2022, and price talk was adjusted from Libor plus 425 bps to 450 bps with a 1% Libor floor.
Current pricing on the term loan is Libor plus 275 bps.
Lenders were being offered a 5 bps consent fee and a 20 bps extension fee.
Credit Suisse Securities (USA) LLC and J.P. Morgan Securities LLC were leading the deal.
When the extension was first launched, the company was also seeking a new $2.5 billion seven-year term loan to refinance its 2017, 2018 and 2019 unsecured notes.
The new term loan had been talked at Libor plus 425 bps to 450 bps with a 1% Libor floor, an original issue discount of 99 and 101 soft call protection for one year.
However, the new term loan was pulled earlier this week as the company decided it was instead going to raise $2.5 billion of senior secured notes due 2022.
On Wednesday, the company officially announced the withdrawal of its bond offering.
“Whilst we have no debt maturing until April 2017, the objective of the refinancing was to extend Fortescue’s maturity profile and minimize interest costs,” said Nev Power, chief executive officer, in a news release.
“Debt capital markets were not favorable at this time and as a result we think it is a disciplined and prudent decision to defer the voluntary refinancing at this stage.”
Fortescue is an East Perth, Australia, iron ore producer.
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