2 bln bond sale secures iron ore expansion
SYDNEY, March canada goose uk outlet canada goose outlet nyc 15 (Reuters) Australia Fortescue Metals Group raised $2 billion in a heavily oversubscribed bond sale that secures funding canadian goose jacket to triple its iron ore production to 155 million canada goose coats on sale tonnes a year by mid cheap canada goose uk 2013.
The company had launched the high yield bond sale in the United States canada goose clearance to raise $1 billion, and after being about five times oversubscribed canada goose uk shop at favourable pricing for the company, it opted to double the raising.
Fortescue bond sale comes Canada Goose Online as canada goose factory sale companies globally have embarked on canada goose a bond issuing spree, Canada Goose Coats On Sale raising huge cheap Canada Goose sums at low yields. Tight loan markets and low yields have made bonds an attractive avenue for companies to raise funds, while investors are seeking yields that are still better than the low rates offered by deposits.
Asia ex Japan Canada Goose sale bond issuances by companies and sovereigns have already hit $36 billion this year compared with $76.2 billion for all of 2011, according to Thomson Reuters data.
Interest costs have come down substantially for Fortescue, which started producing iron ore just four years ago, with the canada goose store new 5 year notes paying an interest rate of 6 percent a year and 10 year notes canada goose coats paying 6.875 percent.
In 2010 the company had to pay 7 percent on its 5 year notes.
clearly buy canada goose jacket on the march to investment grade, and I think that been well and truly recognised by the credit markets pricing our debt at such attractive rates, Chief Financial Officer Stephen Pearce told reporters on a conference call.
Fortescue has a BB credit rating from Standard uk canada goose outlet Poor while Fitch rates it at BB+, one notch below investment Canada Goose Parka grade.
Pearce said the rating agencies would be looking for the company to deliver on its expansion plan, which it expects to achieve within its https://www.canadagoosejacket-outlet.ca budget of $8.4 billion and on time by June 2013, before raising their ratings.
we would expect the rating agencies to recognise that over the next Canada Goose online 12 month period, he said.
BULLISH ON ORE PRICES The uk canada goose company dismissed bearish forecasts by Goldman Sachs analysts seeing iron ore prices sliding below $100 a tonne by 2016.
is still very canada goose clearance sale good strength in the iron ore market going forward, Chief Executive Nev Power said, adding he had just returned from visits to Chinese steel mills.
not forecasting or expecting an iron ore price below $120 in the short term. We think it trade in the $120 150 range, he said.
He and the three iron ore giants, Brazil Vale, Rio Tinto and BHP Billiton, have all said high cost iron ore production in China effectively sets Canada Goose Outlet a floor price for canada goose uk black friday iron ore around $140 a tonne.
Power was confident that even if prices do fall, the company has some protection as at the Canada Goose Jackets same time, the Australian dollar would be likely canada goose black friday sale to fall, which would lower the company costs.
The latest bond sale also gives buy canada goose jacket cheap the company some room for maneuver if markets turn down.
secures our funding for the 155 million tonnes per annum expansion to be delivered by June 2013, including the mining fleet, and provides us with a buffer through any uncertainty in the markets in the short term, Power said.
Fortescue shares rose 1.9 percent to A$5.94, defying a 1.8 percent drop in the metals and mining index. (Reporting by Narayanan Somasundaram; Editing by Muralikumar Anantharaman).