Anglo American Rene Medori
JOHANNESBURG (miningweekly.com) – Mining giant Anglo American on Tuesday successfully completed its bond buy-back, launched in February, delivering $190-million net debt benefit after “retiring” contractual repayment obligations.
The buy-back programme, comprising euro-, sterling- and dollar-denominated maturities from December 2016 to September 2018, realised a $130-million upfront net debt benefit through the discounts achieved on notes and settlement of derivatives and a further $60-million over two years through interest savings.
The group used $1.7-billion cash to retire $1.83-billion of contractual repayment obligations, including derivatives hedging the bonds.
“Anglo American’s bond maturities have been reduced by $250-million, $680-million and $900-million for 2016, 2017 and 2018 respectively, reducing the group’s bond repayment obligations at original hedged rates to $1.4-billion, $1.9-billion and $2.5-billion respectively for these years,” Anglo said in a statement on Tuesday.
The notes purchased by Anglo American were cancelled.
“Although the bond buy-back was funded from cash reserves, Anglo American has maintained its conservative levels of liquidity ($14.8-billion at December 31) by entering into a $1.5-billion club facility with three international banks,” said Anglo American FD René Médori.
The facility had a two-year maturity, closely matching the weighted average maturity of the bonds targeted and is broadly on the same terms as Anglo American’s existing core $5-billion revolving credit facility, with no financial covenants.
“We will continue to actively manage our debt profile as we progress with the group's portfolio restructuring.”
Anglo American announced the bond buy-back on February 18, shortly after three major ratings agencies stripped the group of its invesment-grade rating.