Ann: Fortescue announces multi-billion dollar refinancing, page-11

From Macrobusiness, got the article before they had a chance to make it only available to subscribers.

The sarcasm continues (see last paragraph). To me extending repayment dates with possible interest savings is prudent and as MB States it's not deleveraging, however it's necessary at this point in time and gives them room to move. As long as it's covenant light as per current terms, this is a positive.

FMG needs to only cover interest charges  which it will be able to do and still retain the flexibility to repay early if their situation changes

I see no negatives here, quite the opposite that lenders are willing to back FMG

Fortescue embraces debt
Posted by Houses and Holes in Commodities, Featured Articleat 8:24am on March 5, 2015 | 0 comments


From The Australian:

Struggling Australian iron ore miner Fortescue Metals has announced a new $US2.5 billion senior secured debt issue, and will also extend the maturity on its existing $US4.9 billion credit facility beyond 2021.

The move gives strength to Fortescue’s balance sheet after continued weakness in the iron ore price has left investors wary of the company.

“The refinancing will extend Fortescue’s debt maturity profile while maintaining flexibility and minimising interest cost. This initiative complements the great work done in reducing costs and improving productivity and efficiency across all of Fortescue’s operations,” Chief Executive Officer Nev Power said.

So deleveraging has turned into maturity extension.  Hardly encouraging. But at least it’s a nicely timed plunge into further debt as interest rate markets offer a little reprieve. Here’s the 2019 bond: