Debt to equity, page-18

FMG as at 31/12/14 debt = $8.8b (excludes cash on hand as at 31-12-14 = $1.6b)

Current debt profile, based on Calendar Year and all in USD

2017 $1.0b    6.00%
2018 $400.0m 6.857%
2019 $4.9b    8.25%  
2020 $1.5b    ??
2022 $1.0b    ??

Total $8.8b

Average Cost of borrowing 5.27%
Senior secured credit facility $4.9b, balance Senior Unsecured notes;

What in percentage terms will the new rates be including the premium??

If they can reduce the $4.9b from 8.25% to a much lower rate there will be a significant interest cost saving.

Assuming an overall decrease on average interest cost from 5.27% to say 4.27% a saving of $90.0m or $0.50 per mt, further reducing all in costs.

They are managing and reducing costs that are in their control, if they can also increase ore grades to limit the discount received on their ore against the Platts index (62.0% fe) then their break even point becomes significantly lower. The reduction of the discount applied to the ore mined and shipped is the next step.

They will be moving closer and closer to matching the all in costs of BHP at least.


"The miner has invited holders of its 6 per cent senior notes due in 2017, all of the 6.857 per cent senior notes due in 2018, and its 8.25 per cent notes due in 2019 to tender for cash.

It is offering US$1002.50 for its 2017 notes, US$1007.50 for its 2018 notes, and US$970 for its 2019 notes, with an added US$30 early participation paymemt"