Fortescue Metals Swells Bond Offer to US$1.5 Billion

By David Winning Features Dow Jones Newswires

Fortescue Metals Group Ltd. (FMG.AU) swelled a bond offer to US$1.5 billion due to strong investor demand, in a move that enables it to push out a repayment date on its near-term debt to 2022.

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Fortescue, the world's No. 4 iron-ore miner by output, had initially launched its offer of senior unsecured notes at US$1 billion. It expects to complete the offering on or around May 12.

The bond offer enables Fortescue to refinance the outstanding balance of US$976 million in a senior secured credit facility that had been due for repayment in 2019, as well as senior unsecured notes worth US$478 million due to mature in 2022.

"We are very pleased with the continued support from the U.S. capital markets for Fortescue, with the strong demand for the notes resulting in the offer being upsized to US$1.5 billion," said Chief Financial Officer Elizabeth Gaines. "The successful completion of this offering has extended our nearest term maturity to 2022 on improved terms and conditions, consistent with our disciplined capital management strategy."

Fortescue has been striving to overhaul a debt pile built up in a decadelong expansion that turned it into a major competitor in the global market for iron ore, used to make everything from cars to skyscrapers. Stronger iron-ore prices earlier this year enabled management to issue a US$1 billion repayment notice for its 2019 senior secured credit facility, in a move that saved it tens of millions of dollars in annual interest costs. That followed other early repayments of loans.

Write to David Winning at david.winning@wsj.com

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(END) Dow Jones Newswires

May 09, 2017 18:49 ET (22:49 GMT)