fortescue refinances $us2bn to grow

Link--
http://www.tradingroom.com.au/apps/view_breaking_news_article.ac?page=/data/news_research/published/2010/10/283/catf_101010_165700_3120.html



SYDNEY, Oct 10 AAP
October 10 2010, 4:57PM
Fortescue Metals Group Ltd has refinanced $US2.04 billion ($A2.07 billion) of its debt to help deliver further expansion for the iron ore miner.

The resources company refinanced its senior secured notes to allow the company to push ahead with its two-ports, three-hubs mining strategy.

"This is a monumental day for Fortescue," Fortescue chief executive Andrew Forrest said in Perth on Sunday.
"To be able to be completely relieved from the major financing we had only four years ago, and if your remember prior to that the company did not exist two and a half, three years before that, we are a startup company which has achieved what it has in seven years.

"We are now very excited."

Fortescue would gain initial savings of $60 million a year, which could increase to hundreds of millions of dollars a year, said Mr Forrest.

Investment banks JPMorgan and the Royal Bank of Scotland were the providers of the corporate bank facility.

The initial interest date was 7.5 per cent, which is linked to the London interbank offered rate (LIBOR), down from 10.5 per cent on the original facility.

Maturity on the new facility was October 2015.

"We have quite literally replaced a heavily structured highly secured financing package with an unsecured and unstructured financial package, which allows the company absolute freedom in all areas it would like to grow," he said.

The company had paid a premium to repay $600 million owing now instead of over six years, Mr Forrest said.

The new finance arrangements allowed Fortescue to fund its previously announced and advanced expansion plans.

"We are not aiming to be the world's largest iron ore company, but we are certainly aiming to be the world's best iron ore company," he said.

Mr Forrest said the ability to pay dividends to shareholders soon would be "very nice".

"It is certainly the board's intention to pay dividends as soon as possible," he said.

"But all shareholders would agree with us that a very large proportion of Fortescue's cash flow should be invested back into Australia, back into making Australia more competitive and increasing our market share overseas."