MORENCI — Freeport-McMoRan Copper & Gold Inc. — referred to as FCX on the New York Stock Exchange — announced completion of agreements with two bank syndicates providing committed financing for a $4 billion bank Term Loan and a new $3 billion Revolving Credit Facility.
The funding is for FMI’s proposed acquisitions of Plains Exploration & Production Company (NYSE: PXP) and McMoRan Exploration Co. (NYSE: MMR).
Freeport is the largest publicly traded copper company on the New York Stock Exchange. Locally, it owns and operates the giant Morenci copper mine in Greenlee County. It is the largest operating open pit copper mine in North America.
The San Juan-Dos Pobres copper mine in neighboring Graham County near Safford is FMI owned and operated. It consists of two major copper ore bodies.
The Term Loan will be drawn at the closing of the acquisitions and may be used to fund the cash portion of the acquisitions, refinancing of certain debt outstanding at Plains Exploration and McMoRan Exploration, or for other general corporate purposes. The Term Loan will mature five years from the date of the first borrowing and will bear interest determined by reference to FMI’s credit ratings — currently LIBOR + 1.50 percent.
In connection with the completion of the Term Loan, lender commitments under FMI’s acquisition bridge facilities have been reduced from $9.5 billion to $5.5 billion.
The new five-year $3 billion Revolving Credit Facility will replace FCX’s existing $1.5 billion revolving credit facility on completion of the Plains Exploration transaction.
J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, BNP Paribas Securities Corp., Citigroup Global Markets Inc., HSBC Securities (USA) Inc., Mizuho Corporate Bank, Ltd., Sumitomo Mitsui Banking Corporation, The Bank of Nova Scotia, and The Bank of Tokyo-Mitsubishi UFJ, Ltd. were joint lead arrangers and joint book runners for the Term Loan and the Revolving Credit Facility.
The proposed acquisitions are expected to close in second quarter 2013.