Freeport-McMoRan says greenshoe exercised, raising convertibles to $575 million

New York, Feb. 11 - Freeport-McMoRan Copper & Gold Inc. said the underwriters of its recent offering of 7% convertible senior notes due 2011 exercised the $75 million over-allotment option in full, raising the size of the deal to $575 million.

The New Orleans, copper, gold and silver mining company originally sold $500 million of the notes before the market open on Feb. 6 in a drive-by offering. The deal was increased at pricing from $350 million.

The convertibles were priced to yield 7% with a 70% initial conversion premium.

Bookrunner for the Rule 144A offering was Merrill Lynch & Co.

Proceeds from the convertibles will be used to repay all Freeport's outstanding bank debt, for working capital and for general corporate purposes.

"The success of this $575 million offering and our recently completed $500 million senior note transaction demonstrate the confidence of the financial markets in the strength and reliability of our world class Grasberg mine in Indonesia with its long-lived, low-cost copper and gold reserves," said James R. Moffett, chairman and chief executive officer of Freeport, in a news release. "The recent offerings strengthen our financial position and our financial flexibility. The authorization by our board of directors of the initiation of a cash dividend on our common stock reflects this improved position and the strong cash flow generating capacity of our business."

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