Rio Tinto has announced that it will launch a bond purchase and redemption plan of up to $2.25 billion equivalent to reduce gross debts as part of its ongoing capital reduction plans.
Following the completion of $10 billion in US dollar note redemptions and repurchases in 2016–17, Rio will issue roughly $1.4 billion in redemption notices via four series of US-dollar denominated notes, to be matured in 2021–2022.
The first will be for 4.125 per cent notes due on May 2021; the second for 3.75 per cent notes due September 2021; the third for 3.5 per cent notes due March 2022; and the fourth for 2.875 per cent notes due August 2022, all to be issued by Rio Tinto Finance (USA).
The company will also make a cash tender offer to shareholders outside of the US for the sale of up to $850 million in two series of Euro notes: €750,000,000 at two per cent to mature in 2020, and €500,000,000 at 2.875 per cent to mature in 2024.
In other recent news, Rio Tinto announced the $US1.7 billion sale of its Queensland-based Hail Creek and Valeria coal assets to Glencore. Rio holds a 82 and 71.2 per cent stake in the two projects, respectively.