By Paul Deckelman
New York, May 10 – Fortescue Metals Group Ltd. was heard by high-yield syndicate sources to have priced an upsized $1.5 billion two-part offering (BB-/BB+) of notes on Tuesday.
The deal consisted of $750 million of 4¾% five year senior notes and $750 million of 5 1/8% seven-year senior notes.
The five-year notes priced inside of price talk envisioning a yield of 5% to 5¼%.
The seven-year notes had been talked at 37.5 basis points more than the five-year yield.
The deal, which will settle on May 12, was upsized from an originally shopped $1 billion.
The company’s chief financial officer, Elizabeth Gaines, said in a company statement announcing the pricing that “[w]e are very pleased with the continued support from the US capital markets for Fortescue, with the strong demand for the notes resulting in the offering being upsized to US$1.5 billion.”
The Rule 144A and Regulation S transaction was brought to market via J.P. Morgan Securities LLC, Credit Suisse, Deutsche Bank Securities Inc. and Morgan Stanley & Co. LLC.
The East Perth, Western Australia-based iron ore mining company’s FMG Resources (August 2006) Pty Ltd. subsidiary will be the official issuer of the notes.
The notes will be non-callable for the life of the issue, other than via a call at par within three months of maturity for both tranches.
Fortescue – Australia’s third-largest iron ore producer and the world’s fourth-largest exporter into the seaborne iron-ore market – plans to use the bulk of the new-deal proceeds to repay term loan debt. It has $976 million of such debt outstanding scheduled to mature in 2019.
The company also said that it would repay $478 million of existing unsecured bond debt maturing in 2022.
The company thus extends its nearest maturity from 2019 to 2022, while improving the terms on its 2022 debt, the statement said.
| Issuer: | FMG Resources (August 2006) Pty. Ltd. (subsidiary of Fortescue Metals Group Ltd.)
|
| Amount: | $1.5 billion, upsized from $1 billion
|
| Securities: | Senior notes
|
| Bookrunners: | J.P. Morgan Securities LLC, Credit Suisse, Deutsche Bank Securities Inc., Morgan Stanley & Co. LLC
|
| Call protection: | Non-callable, other than par call within three months of maturity
|
| Trade date: | May 9
|
| Settlement date: | May 12
|
| Ratings: | S&P: BB-
|
| Fitch: BB+
|
| Distribution: | Rule 144A and Regulation S
|
| Marketing: | Quick to market
|
|
|
| Notes due 2022
|
| Amount: | $750 million
|
| Maturity: | 2022
|
| Coupon: | 4¾%
|
| Price talk: | 5% to 5¼%
|
|
|
| Notes due 2024
|
| Amount: | $750 million
|
| Maturity: | 2024
|
| Coupon: | 5 1/8%
|
| Price talk: | 37.5 bps more than five-year yield
|
© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere.
For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.
