Rio prices bonds

Rio Tinto has priced $US3.5 billion ($A4.80 billion) of fixed rate bonds in two parts.

Rio Tinto has priced $US3.5 billion ($A4.80 billion) of fixed rate bonds in two parts, the company said in a statement to the Australian Securities Exchange.

The bonds were issued by the company’s US arm, Rio Tinto Finance with payment of principal and interest fully guaranteed by Rio Tinto Plc and Rio Tinto Ltd.

The bonds have been priced $US2 billion of five year and $US1.5 billion of 10 year SEC registered securities.

The company said the 5-year notes pay a coupon of 8.95% and will mature on 1 May 2014 and the 10-year notes pay a coupon of 9.00% and will mature on 1 May 2019.

According to Rio Tinto chief financial officer Guy Elliot, the issue was logical given the company’s debt levels and the current market.

“With the bond markets open for business it makes sense for us to be taking advantage of the opportunity,” he said.

“This issue is part of our ‘business as usual’ capital management and the normal process of terming out existing debt facilities.

“We have had a high level of interest and are very pleased with the outcome.”

The move comes during a busy period for the miner, with annual meetings to be held in London and Sydney in coming days.

The meetings will be the board’s first opportunity to face retail investors since the announcement of its US$19.5 billion investment deal with Chinalco.

They will also be the last official meetings for Rio chairman Paul Skinner, who will step down after next week’s meeting in Sydney.

He will be replaced by the incoming Jan du Plessis.

Shareholders in both London and Sydney have raised concerns over the Chinalco deal, fearing too much influence going into the hands of a state-owned Chinese company.

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