Wednesday, 06 Jul 2011
It is reported that Fortescue, Australia biggest junk bond seller might return to debt markets this year to help raise capital for a USD 8.4 billion iron ore expansion.
Mr Stephen Pearce CFO of Fortescue said "Exactly what the form of approach will be and exactly what markets we'll access is still work in progress."
He said the company would fund its capital needs from about USD 2.5 billion in cash, two years of strengthening cash flow and additional facilities it plans to obtain this year.
He added that the company increased to USD 600 million an undrawn revolving loan of USD 500 million it set up in May with a lending group made up of nine Australian and international banks.
Mr Pearce said, without elaborating on the pricing benchmark that the three-year unsecured loan was priced at a 325-basis-point margin. But he acknowledged a recent weakness in investor risk appetite and said the company would continue to look at funding options.
The expansion would almost triple Fortescue iron ore output as demand increased.
The World Steel Association announced in April that steel demand may increase by 6 per cent next year. (sourced from TheAustralian)
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