MORENCI — Freeport-McMoRan Copper & Gold Inc. — listed as FCX on the New York Stock Exchange — announced on March 1 the pricing of $6.5 billion of senior notes in four tranches, consisting of 5-year, 7-year, 10-year and 30-year senior notes. 

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 in southeastern Arizona. 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.  

A tranch is a piece, portion or slice of a deal of structured financing.

Following is a summary of the four new tranches of debt, which will have an aggregate weighted interest cost of approximately 3.9 percent:




2.375% Senior Notes (1)

$1.5 Billion

Due March 15, 2018

3.100% Senior Notes (2)

$1.0 Billion

Due March 15, 2020

3.875% Senior Notes (3)

$2.0 Billion

Due March 15, 2023

5.450% Senior Notes (4)

$2.0 Billion

Due March 15, 2043

(1) Priced at 99.990% to yield 2.377%

(2) Priced at 99.962% to yield 3.106%

(3) Priced at 99.941% to yield 3.882%

(4) Priced at 99.544% to yield 5.481%

The sale of the senior notes is expected to settle on March 7, 2013, subject to customary closing conditions. FCX intends to use the net proceeds from the offering, together with the net proceeds of its term loan, primarily to pay for the Plains Exploration & Production Company (PXP) and McMoRan Exploration Co. (MMR) acquisitions, including for the payment of cash consideration for the acquisitions and the repayment of certain indebtedness of PXP.

If the PXP acquisition does not close, FCX will be required to redeem all of the outstanding 7-year, 10-year and 30-year notes at 101 percent, plus accrued and unpaid interest. As previously announced, PXP and MMR stockholder meetings to approve the acquisitions will be held after the U.S. Securities and Exchange

Commission has declared effective the respective registration statements on Form S-4 filed in connection with the acquisitions. The transactions are expected to close in second-quarter 2013.

Freeport McMoRan said in its news release that the release is for informational purposes only and is not an offer to buy or the solicitation of an offer to sell any securities of FCX.

The Notes have not been registered under the Securities Act, or any applicable state securities laws, and will be offered only to qualified institutional buyers pursuant to Rule 144A promulgated under the Securities Act and outside the United States to non-U.S. persons in accordance with Regulation S under the Securities Act.

Unless so registered, the Notes may not be offered or sold in the United States except pursuant to an exemption from the registration requirements of the Securities Act and any applicable state securities laws.

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