Freeport-McMoRan may issue equity-linked securities

By Angela McDaniels

Seattle, Nov. 20 - Freeport-McMoRan Copper & Gold Inc. may issue equity-linked securities and use the proceeds to reduce the debt it will incur to fund the acquisition of Phelps Dodge Corp., according to a 425 report filed with the Securities and Exchange Commission on Monday.

The company anticipates that cash flows from the combined business and the continuation of positive copper markets will allow it to achieve "significant" near-term debt reduction.

It may issue the equity-linked securities, issue new equity or hold asset sales in order to reduce debt further, according to the filing.

The New Orleans-based explorer, miner and producer of copper, gold and silver is acquiring Phelps Dodge for $126.46 per share for a total transaction value of $26 billion and plans to secure $10.5 billion of term loans and to issue $6 billion of bonds to fund the cash portion of the deal.

The acquisition is expected to close by the end of the first quarter of 2007.

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