Not for Release in the United States
23 April 2015
The Companies Officer Australian Stock Exchange Exchange Plaza
2 The Esplanade
Perth WA 6000
Dear Sir
Fortescue Issues US$2,300 million of Senior Secured Notes
Fortescue Metals Group Limited (Fortescue) (ASX: FMG) has today completed an offering of Senior Secured Notes. The offering was initially launched at US$1,500 million and due to demand was upsized to US$2,300. The offering is expected to settle on or about 27 April 2015, subject to customary closing conditions.
Fortescue Chief Executive Officer, Mr Nev Power said:
"We've seen strong demand from the market which will result in repayment of our 2017 and 2018 debt in full, refinancing of US$450m of our 2019 debt and an additional US$350m to further strengthen our balance sheet."
"Once again the US capital markets have shown great support for Fortescue. The March 2015 quarterly results, reduction in operating costs and our track record of delivery have all been key factors in this great outcome for Fortescue", Mr Power said.
It is estimated that the net proceeds from this offering will be approximately US$2,203 million, after deducting estimated discounts and issue commissions. Fortescue will use the net proceeds to:
1. Redeem the outstanding 2017 and 2018 Senior Unsecured Notes;
2. To swap certain of the 2019 Notes for New Senior Secured Notes; and
3. To repay, redeem, repurchase or otherwise retire outstanding indebtedness maturing in 2019.
Details of the US$2,300 million Senior Secured Notes are provided below:
Fortescue Metals Group Limited ABN 57 002 594 872 ACN 002 594 872
ADDRESS Level 2, 87 Adelaide Terrace, East Perth, Western Australia 6004
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Principal Amount:
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US$2,300 million
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Interest Rate:
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9.75% per annum
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Term:
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7 years with a non-call period of 3 years
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Guarantors:
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Fortescue and its direct and indirect restricted subsidiaries, consistent with the Senior Unsecured Notes and existing Senior Secured Credit Facility
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Security
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Secured over the assets of Fortescue and each material subsidiary subject, in certain cases, to obtaining third party consents.
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Terms and conditions
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Substantially consistent with the company's existing Senior
Unsecured Notes and Senior Secured Credit Facility.
All debt facilities, including these new Senior Secured Notes, have no financial maintenance covenants.
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Ranking of the
Notes:
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pari passu with all existing and future senior secured indebtedness
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The following chart shows Fortescue's pro forma debt maturity profile after the transaction is completed. This includes the full redemption of 2017, 2018 and partial redemption of the 2019 Senior Unsecured Notes.
5,000
4,500
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
0
4,876
2,300
1,050 1,000
CY2015 CY2016 CY2017 CY2018 CY2019 CY2020 CY2021 CY2022
Senior Secured Credit Facility Senior Unsecured Notes Senior Secured Notes Refinanced Unsecured Notes
Chief Financial Officer Stephen Pearce said, "Today's outcome further strengthens Fortescue's financial position as we have extended our debt maturity profile, while maintaining significant flexibility and ensuring no maintenance covenants on any of our debt." Mr Pearce said.
Yours sincerely
Fortescue Metals Group Ltd
Ian Wells
Company Secretary
Media Contacts:
Luke Forrestal
M: + 61 427 938 094; E: [email protected]
This announcement has been prepared for use in Australia and may not be released in the United States. This announcement does not constitute an offer of securities for sale in the United States. Securities may not be offered or sold in the United States without registration under the US Securities Act of 1933 or an exemption from registration.