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Fortescue Sets Lender Meeting for $4.5 Billion Term Loan

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Oct. 2 (Bloomberg) -- Fortescue Metals Group Ltd., a producer of iron ore, will hold a lender meeting tomorrow at 9:30 a.m. in New York to discuss a $4.5 billion covenant-lite term loan it’s seeking to refinance debt, according to a person with knowledge of the transaction.

Credit Suisse Group AG is arranging the financing for the Perth, Australia-based company and commitments will be due Oct. 10, said the person, who asked not to be identified because the deal is private.

The five-year debt will pay interest at 4.75 percentage points more than the London interbank offered rate, said the person. Libor, a rate banks say they can borrow in dollars from each other, will have a 1.25 percent floor.

Fortescue is proposing to sell the loan at 99 cents on the dollar, the person said, reducing proceeds for the company and boosting the yield to investors.

Lenders are being offered one-year soft-call protection of 101 cents, according to the person, meaning the company would have to pay 1 cent more than face value to refinance the debt during the first year.

To contact the reporter on this story: Michael Amato in New York at mamato3@bloomberg.net

To contact the editor responsible for this story: Chapin Wright at cwright4@bloomberg.net

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