Fortescue pays off billions in debt

Fortescue has issued a US$650 million repayment notice for its 2019 secured term loan, a week after it began the repayment of US$577 million worth of notes last week.

The miner announced a repayment notice for its 2019 senior secured term loan , which will be made at par from accumulated cash on Monday, 16 May, creating approximately US$28 million in interest savings per year.

It follows fellow major Rio Tinto announcing its early repayment of debt in an effort to strengthen their balance sheet and reduce gross debt levels.

Commenting on Fortescue’s repayment, FMG CEO Nev Power stated: “We are committed to ongoing debt reduction and have accelerated the repayment of the term loan and notes on the back of strong cash flows from sustainable operational efficiencies and cost reductions.”

FMG chief financial officer Stephen Pearce added that “this US$650 million, in conjunction with last week’s US$577 million, brings Fortescue’s total FY16 debt repayments to US$2.3 billion”.

“This has generated annual interest savings of US$164 million.

“Our ongoing strategy of cash accumulation for debt repayment, together with consideration of alternative re-financing options, will further strengthen our balance sheet.”

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