By Devika Patel
Knoxville, Tenn., Feb. 12 - Rio Tinto plc and Rio Tinto Ltd. said they will raise $7.2 billion from a private placement of 60-year subordinated convertible bonds with Aluminum Corp. of China.
The notes will be sold in two tranches, with the ones in the first tranche convertible at $45.00 per share and the ones in the second tranche convertible at $60.00 per share.
The first tranche will be $3.1 billion in size, and the second tranche will be $4.1 billion.
Of the notes being sold, 63.3%, or $4.56 billion, will be convertible into Rio Tinto plc shares and 36.7%, or $2.64 billion, will be convertible into Rio Tinto Ltd. shares.
The bonds issued by Rio Tinto plc will have a 9% coupon, and the bonds issued by Rio Tinto Ltd. will have a 9.5% coupon.
The bonds will be callable after seven years.
If converted, the bonds would increase Aluminum's current shareholding to 19% in Rio Tinto plc and 14.9% in Rio Tinto Ltd., equivalent to an 18% interest in the Rio Tinto Group.
Rio Tinto is a mining company based in London and Melbourne, Australia.
| Issuer: | Rio Tinto plc, Rio Tinto Ltd.
|
| Issue: | Subordinated convertible bonds
|
| Amount: | $7.2 billion
|
| Maturity: | 2069
|
| Coupon: | 9% (plc), 9.5% (Ltd.)
|
| Price: | Par
|
| Conversion price: | $45.00 (first tranche), $60.00 (second tranche)
|
| Call option: | After seven years
|
| Warrants: | No
|
| Investor: | Aluminum Corp. of China
|
| Announcement date: | Feb. 12
|
| Stock symbol: | London: RIO, Australia: RIO
|
| Stock price: | 1,984.83p, A$52.00 at close Feb. 12
|
|
|
| Rio Tinto plc notes
|
| Amount: | $4,557,600,000
|
|
|
| Rio Tinto Ltd. notes
|
| Amount: | $2,642,400,000
|
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