Freeport-McMoRan gets $7 billion loan commitments for planned buyouts

By Susanna Moon

Chicago, Feb. 19 - Freeport-McMoRan Copper & Gold Inc. said it sealed commitments for a $4 billion five-year term loan and a $3 billion five-year revolving credit facility for its planned acquisitions, reducing its bridge loans to $5.5 billion.

The company completed agreements with two bank syndicates for committed financing in connection with its proposed acquisitions of Plains Exploration & Production Co. and McMoRan Exploration Co., according to a press release by Freeport.

As noted before, Freeport-McMoRan signed definitive merger agreements to acquire Plains Exploration and McMoRan Exploration in a stock-and-cash transaction valued at about $20 billion.

Interest on the new term loan will be Libor plus 150 basis points, based the company's credit ratings.

Proceeds will be used to fund the cash portion of the acquisitions, to refinance outstanding debt or for general corporate purposes.

In connection with the term loan, lender commitments under the company's acquisition bridge facilities were reduced from $9.5 billion.

In addition, the company also entered into agreements for a new five-year $3 billion revolver, which will replace its $1.5 billion revolving credit facility on completion of the Plains acquisition.

J.P. Morgan Securities LLC, BofA Merrill Lynch, BNP Paribas Securities Corp., Citigroup Global Markets Inc., HSBC Securities (USA) Inc., Mizuho Corporate Bank, Ltd., Sumitomo Mitsui Banking Corp., Bank of Nova Scotia and Bank of Tokyo-Mitsubishi UFJ, Ltd. were the joint lead arrangers and joint bookrunners for the term loan and the revolving facility.

The proposed acquisitions are expected to close in second quarter of 2013.

Phoenix-based Freeport-McMoRan is a producer of gold, copper and molybdenum as well as a manufacturer of copper wire and bars, copper strip and cadmium copper.

Plains Exploration is a Houston-based oil and gas company.

McMoRan Exploration is a natural gas and oil company based in New Orleans.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.