https://www.engineeringnews.co.za

Loan re-pricing saves Fortescue $50m a year in interest

11th November 2013

By: Mariaan Webb

Creamer Media Senior Deputy Editor Online

  

Font size: - +

JOHANNESBURG (miningweekly.com) – The successful re-pricing of Fortescue Metals’ $4.95-billion term loan is saving the iron-ore miner $50-million a year in interest payments.

Lead arrangers Credit Suisse and JP Morgan have amended and re-priced the facility, which reduced the previous margin of 4.25% to 3.25% and extended the maturity by 21 months to June 30, 2019.

Fortescue said that the margin of 3.25% would decrease further as the company reduced leverage through debt reduction. If the miner achieved a leverage ratio of 2.5 times or less, the margin would reduce to 2.75%. This would represent a total saving of 1.5%.

“The amended terms of the facility reflect Fortescue’s improving credit profile, with the ability to realise further savings in interest costs as leverage decreases through debt reduction and increased earnings,” commented CFO Stephen Pearce.

Fortescue CEO Nev Power said in a statement that he was pleased with the support of the US capital markets. “The result again demonstrates the market’s confidence in our strategy of ramping up production and then progressively repaying the debt that has funded our expansion.”

The iron-ore company, which owns operations in the Pilbara region of Western Australia, is expanding its capacity to 155-million tonnes a year.

Edited by Creamer Media Reporter

Comments

Showroom

Werner South Africa Pumps & Equipment (PTY) LTD
Werner South Africa Pumps & Equipment (PTY) LTD

For over 30 years, Werner South Africa Pumps & Equipment (PTY) LTD has been designing, manufacturing, supplying and maintaining specialist...

VISIT SHOWROOM 
John Deere (Pty) Ltd
John Deere (Pty) Ltd

In 1958 John Deere Construction made its first introduction to the industry with their model 64 bulldozer.

VISIT SHOWROOM 

Latest Multimedia

sponsored by

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION







sq:0.093 0.145s - 156pq - 2rq
Subscribe Now