Freeport-McMoRan amends covenants, adds collateral, guarantee trigger

By Angela McDaniels

Tacoma, Wash., Feb. 26 – Freeport-McMoRan Inc. amended its revolving credit facility and term loan on Friday, according to a 10-K filing with the Securities and Exchange Commission.

The changes included modifications of the maximum leverage ratio and minimum interest expense coverage ratio to provide the company with additional flexibility and a reduction in the revolver commitments to $3.5 billion from $4 billion.

A springing collateral and guarantee trigger was added. If the company has not entered into definitive agreements for asset sales totaling $3 billion by June 30 that are reasonably expected to close by Dec. 31, 2016, it will be required to secure the revolver and the term loan with a mutually acceptable collateral and guarantee package.

If the asset sales totaling $3 billion have not occurred by Dec. 31, 2016, then the springing collateral and guarantee trigger will go into effect.

Freeport-McMoRan is a natural resources company based in Phoenix.

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