Fortescue Metals Group has tapped into strong support from investors to complete a $US1.5 billion ($2.04 billion) bond offering.
The iron ore miner had originally targeted $US1 billion, but due to “significant investor demand” upsized the offering of senior unsecured notes to $US1.5 billion.
Fortescue said the offering allows the company to refinance an $US976 million loan due in 2019, as well as senior unsecured notes worth $US478 due in 2022.
It means the company’s nearest term debt maturity has been extended to 2022. Fortescue expects to settle the offering on May 12.
Fortescue chief financial officer Elizabeth Gaines welcomed the continued support from the US capital markets, with the strong demand for the notes resulting in the offer being upsized.
“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,” Gaines said.
Fortescue chief executive officer Nev Power said the outcome recognises the company’s operational achievements, including safety performance, consistent production, sustained productivity and efficiency gains, together with the continued strength of our balance sheet.
“Fortescue remains focused on its strategy of continued debt repayment and capital flexibility, investing in our core iron ore business and delivering returns to our shareholders,” Power said.
Fortescue has been committed to a strategy of debt reduction for several years now. Most recently, the company announced a plan in March to issue a $US1 billion term loan repayment as part of the strategy.
This transaction reduced the company’s term loan to $US976 million, and followed a similar $US1 billion repayment in December 2016.