Freeport-McMoRan unit wraps early tenders in oversubscribed offer

By Susanna Moon

Chicago, Dec. 5 – Freeport-McMoRan Inc. said subsidiary Freeport-McMoRan Oil & Gas LLC paid $1.26 billion to purchase $1.14 billion principal amount of five series of its notes.

Freeport-McMoRan received tenders of $1.66 billion principal amount of the notes tendered by 5 p.m. ET on Dec. 4, the early participation date, according to a company press release.

The company began a modified Dutch auction cash tender offer on Nov. 20 for up to $1.25 billion of five series of its notes.

The breakdown for the tendered notes and the amount accepted for purchase is as follows:

• $302.9 million of the $487.5 million 6.125% senior notes due 2019 tendered, with $250.6 million, or 51.4%, accepted for purchase;

• $548.5 million of the $975 million 6.5% senior notes due 2020 tendered, with $358 million, or 36.72%, accepted for purchase;

• $266 million of the $390 million 6.625% senior notes due 2021 tendered, with $128.5 million, or 32.96%, accepted for purchase;

• $292.1 million of the $650 million 6.75% senior notes due 2022 tendered, with $201.5 million, or 30.99%, accepted for purchase; and

• $245.7 million of the $975 million 6.875% senior notes due 2023 tendered, with $196.5 million, or 20.16%, accepted for purchase.

The total purchase price per $1,000 principal amount is as follows:

• $1,103.75 for the 6.125% notes;

• $1,097.50 for the 6.5% notes;

• $1,107.50 for the 6.625% notes;

• $1,127.50 for the 6.75% notes; and

• $1,140 for the 6.875% notes.

The total payment included an early tender premium of $30.00 for each $1,000 principal amount of notes tendered by the early participation deadline.

Those who tender after the early deadline will receive the total amount less the early premium.

The total payment per $1,000 principal amount was set using a formula consisting of a base price, including the early participation amount, of $1,081.25 for the 6.125% notes, $1,075 for the 6.5% notes, $1,085 for the 6.625% notes, $1,105 for the 6.75% notes and $1,117.50 for the 6.875% notes, plus a clearing premium of up to $25.00 per $1,000 principal amount for any series of notes.

The company also will pay accrued interest to but excluding the payment date, which was set at Dec. 5 for early tendered notes and Dec. 19 for remaining tenders.

The tender offer will end at 11:59 p.m. ET on Dec. 18. Tendered notes may no longer be withdrawn, as of the early tender date.

J.P. Morgan Securities LLC (866 834-4666 or 212 834-4811 collect) and BofA Merrill Lynch (888 292-0700 or 980 683-3215 collect) are the joint lead dealer managers, and BNP Paribas Securities Corp. is the co-dealer manager. D.F. King & Co., Inc. (866 207-2356 or 212 269-5550 collect) is the information agent and tender agent.

The tender offer will be funded with proceeds from the company’s issue of $3 billion of notes on Nov. 14, according to a previous company press release. Proceeds also are being used to fund the redemption on Dec. 17 of all of the company’s outstanding $500 million 1.4% senior notes due 2015 and its subsidiaries’ $300 million 7.625% senior notes due 2020.

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.

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