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Fortescue renegotiates credit facility

30th October 2013

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

  

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PERTH (miningweekly.com) – Iron-ore major Fortescue Metals on Wednesday told shareholders that it was looking to amend and re-price its $5-billion senior secured credit facility, to reduce the interest rate.

The facility is currently due to mature in October 2017, and has a total coupon of 5.25%.

Fortescue said that its strong financial position, along with the current market condition, has enabled the company to pursue an amendment to the facility to reduce the interest rate payable, to reduce Fortescue’s cost of capital and to extend the maturity of the term loan.

The miner noted that the re-pricing would not increase its debt position, with Fortescue retaining the ability to make early voluntary repayments of the facility, at the company’s option.

The terms and conditions of the facility would also remain consistent with Fortescue’s unsecured notes, and would not contain a financial maintenance covenant.

The amendment process would take two weeks to finalise, subject to the receipt of satisfactory pricing and market conditions.

Edited by Creamer Media Reporter

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