Friday, mining company Anglo American plc (AAL.L) said it has priced a two tranche bond offering comprising $1.250 billion 9.375% senior notes due 2014 and $750 million 9.375% senior notes due 2019. The offering has been made to Qualified Institutional Buyers in the U.S. and to investors outside the U.S. The company expects the offering to close on April 8.
Reports appeared earlier that the financing arm of the mining group, Anglo American Capital plc, was planning to sell $2.0 billion of two-part senior notes in the 144a private placement market, one for five years and the other for 10 years.
Goldman Sachs, Morgan Stanley and Royal Bank Of Scotland were the active joint bookrunning managers, while BNP Paribas and Barclays were the passive joint bookrunning managers for the sale, it was reported.
The economic crisis has wreaked havoc on mining companies, with demand showing a sharp decline. The latest announcement was reportedly spurred by enquiries from investors looking to buy the company's debt.
While announcing the full year results in February, the miner had said that as of December 31, 2008, it had undrawn bank facilities of $6.1 billion, cash deposits of $2.7 billion and commercial paper maturing throughout 2009 of $1.1 billion. "Anglo American's only significant debt repayment in the next year is a $3 billion revolving bank facility (of which $1.1 billion was drawn at 31 December 2008) which matures in December 2009. In addition, a £300 million ($500 million) Euro bond matures in December 2010," the company added.
Regarding the refinancing of the $3 billion facility, Anglo American said at that time that the intention is to refinance part or all of the facility, subject to requirements, taking into consideration proceeds from disposal of assets and cash flow from operations, "using a variety of sources which may include the issue of public bonds in the European and US markets and new bank facilities."
In February, the company reported a decline in profit for 2008, hurt by lower prices and higher operating costs. Additionally, the company said that in order to tackle the challenging economic conditions and conserve cash, it has decided to eliminate 19,000 positions by the end of 2009 and has suspended dividend payments.
Anglo American's fiscal 2008 profit attributable to equity shareholders was $5.215 billion or $4.29 per share, a decline from $7.304 billion or $5.50 per share reported last year. Profit attributable to equity shareholders from continuing operations was $5.215 billion, down from $5.294 billion reported a year ago. Group revenue for 2008 grew to $26.311 billion from $25.470 billion reported last year. Total group revenue, including associates, declined 7.6% to $32.964 billion from $35.674 billion reported last year.
AAL.L is currently trading at 1,314.00 pence, down 26.00 pence or 1.94%, on 125,532 shares.
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