Freeport-McMoRan amends term loan and revolver covenants, pricing

By Tali Rackner

Norfolk, Va., Dec. 9 – Freeport-McMoRan Inc. and Freeport-McMoRan Oil & Gas LLC amended their revolving credit facility and $4 billion term loan agreement on Wednesday to edit financial covenants and interest, according to an 8-K filing with the Securities and Exchange Commission.

For both facilities, JPMorgan Chase Bank, NA is the administrative agent and Bank of America, NA is the syndication agent.

Under the amendments, the maximum total leverage ratio was revised to 5.5 times at Dec. 31, 5.9 times for the first half of 2016, stepping down to 5 times by year-end 2016 and 4.25 times in 2017. The leverage ratio is unchanged at 3.75 times thereafter.

In addition, if the total leverage ratio as of the end of the fiscal quarter beginning Dec. 31, (a) is between 4 times and 4.5 times, the applicable interest rate will be, for any day, 25 basis points more than the rate per annum otherwise applicable; and (b) exceeds 4.5 times, the applicable interest rate will be, for any day, 50 bps more than the rate per annum otherwise applicable.

Also, a mandatory prepayment provision was added. If, as of the last day of any fiscal quarter, the total leverage ratio exceeds 4 times, 50% of the net proceeds from certain asset sales must be applied to repay the term loan (applied to the 2020 tranche and the 2018 tranche pro rata based on relative aggregate outstanding principal amounts under those tranches), the filing said.

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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