Fortescue Metals Group (FMG) has shuffled its multi-billion-dollar debt mountain in a move which appears to be aimed at buying some time in its fight against low iron ore prices.
Diary says it appears because the ambiguous, jargon-laden statement fails to spell out exactly how FMG’s precarious debt position will change.
FMG says it is raising US$2.5 billion in new debt and at the same time intends to repay up to US$700 million on its debt by buying back its notes.
One could draw the conclusion from this that FMG’s total debt load will increase by US$1.8 billion. Whether this would be the right conclusion is another matter.
FMG also says that it intends to extend the maturity date on its existing US$4.9 billion secured credit facility. It says this will result in most of its debt maturing after mid-2021.
FMG doesn’t say what the current maturity date is.
But the final word in this impenetrable attempt at communicating with FMG’s owners belong to its chief financial officer Stephen Pearce, who noted that the “liability management exercise is commonplace in the US”.
Perhaps someone should tell Stephen there is also another common trait in the US: plain speaking.
Diary says it appears because the ambiguous, jargon-laden statement fails to spell out exactly how FMG’s precarious debt position will change.
FMG says it is raising US$2.5 billion in new debt and at the same time intends to repay up to US$700 million on its debt by buying back its notes.
One could draw the conclusion from this that FMG’s total debt load will increase by US$1.8 billion. Whether this would be the right conclusion is another matter.
FMG also says that it intends to extend the maturity date on its existing US$4.9 billion secured credit facility. It says this will result in most of its debt maturing after mid-2021.
FMG doesn’t say what the current maturity date is.
But the final word in this impenetrable attempt at communicating with FMG’s owners belong to its chief financial officer Stephen Pearce, who noted that the “liability management exercise is commonplace in the US”.
Perhaps someone should tell Stephen there is also another common trait in the US: plain speaking.