Fortescue Metals Group announced a voluntary redemption notice of US$1,552 million in relation to the 9.75% Senior Secured Notes due in 2022 (the “Notes”).
The combination of proceeds from the US$1.4 billion Term Loan signed on 21 February 2018, the issue of US$500 million of Senior Unsecured Notes on 1 March 2018 and US$100 million cash, enables the repayment of US$2.0 billion of the outstanding balance of the Notes as follows:
- Principal value of US$448 million of the Notes was redeemed through a tender offer which settled on 21 March, 2018;
- Principal value of US$1,552 million will be redeemed and settled on 27 April 2018; and
- The tender and redemption of the Notes will attract a premium of 9.75% of the principal value.
The remaining balance of the Notes of US$160 million is anticipated to be retired from operating cash flows. Upon completion, the combination of refinancing and debt repayment will lower annual borrowing costs by approximately US$130 million. The following chart shows Fortescue’s pro-forma debt maturity profile at 30 April 2018.
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