Freeport-McMoRan sets Tuesday launch for $11.5 billion facility

By Sara Rosenberg

New York, Feb. 22 - Freeport-McMoRan Copper & Gold Inc. has firmed up timing on its proposed $11.5 billion senior secured credit facility with the scheduling of a bank meeting for Tuesday, according to a market source.

Previously, the launch had simply been labeled as late February business.

JPMorgan and Merrill Lynch are the lead banks on the deal.

The facility consists of a $1.5 billion five-year revolver expected with an initial rate of Libor plus 175 basis points and a 50 bps unused fee, a $2.5 billion five-year term loan A expected with an initial rate of Libor plus 175 bps and a $7.5 billion seven-year term loan B expected at Libor plus 200 bps, according to filings with the Securities and Exchange Commission.

Proceeds from the credit facility, along with $6 billion of senior unsecured notes, will be used to refinance Freeport's existing credit facility and help fund the acquisition of Phelps Dodge Corp. for $25.9 billion in cash and stock.

After giving effect to the transaction, estimated pro forma total debt at Dec. 31 would be $17.6 billion, or about $15 billion net of cash.

For the 12-month period ended Sept. 30, the companies had combined revenues of $16.6 billion, EBITDA of $7 billion and operating cash flows of $5.5 billion. For 2006, the combined company's estimated EBITDA would be $7.9 billion and operating cash flows would be $6.5 billion.

The combined copper, gold and molybdenum mining, exploration and production company will retain the Freeport-McMoRan name and be based in Phoenix.

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