Freeport-McMoRan greenshoes exercised in full to raise total financing to $5.76 billion

By Jennifer Chiou

New York, March 28 - Freeport-McMoRan Copper & Gold Inc. announced the completion of a total of $5.76 billion of equity financings after the full exercise of two over-allotment options.

The company sold a total of $2.875 billion (28.75 million shares) of 6.75% mandatory convertible preferred stock, including a greenshoe for $375 million (3.75 million shares), and 47.15 million common shares at $61.25 per share, which includes a greenshoe for 6.15 million additional shares.

The over-allotment option for the preferreds was increased from $150 million.

After the close on March 22, the company priced an upsized $2.5 billion of the three-year convertible preferreds at par of $100 with an initial conversion premium of 20%.

As already reported, the deal priced at the aggressive end of yield talk and the middle of premium talk.

The offering was increased from $1 billion. It had been talked to price with a dividend of 6.75% to 7.25% and an initial conversion premium of 18% to 22%.

On March 22, Freeport-McMoRan also raised $2.5 billion from the sale of an increased offering of 41 million common shares at $61.25, discounted from the closing price of $61.91 for the stock on the same date. The offering was increased from 35 million shares.

Freeport-McMoRan said that net proceeds from the issues amount to $5.6 billion.

The over-allotment option for the common stock was augmented from 5.25 million shares.

Merrill Lynch and JP Morgan are joint bookrunners of both registered offerings.

New Orleans-based Freeport-McMoRan, a mining concern, intends to use proceeds to repay two outstanding term loans due 2012 and 2014 that were used to help fund its $25.9 billion acquisition of Phelps Dodge Corp., which was closed on March 19.

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