Feb. 19 (Bloomberg) -- Freeport-McMoRan Copper & Gold Inc., the biggest publicly traded copper producer, obtained $7 billion of bank loans to back its proposed purchase of Plains Exploration & Production Co. and McMoRan Exploration Co.
The financing consists of a $4 billion term loan and a $3 billion revolving credit line, each maturing in five years, the Phoenix-based company said today in a statement distributed by Business Wire. The debt may also be used to refinance debt of the companies it is buying or for general corporate purposes.
The group of banks arranging the credit includes JPMorgan Chase & Co., Bank of America Corp., BNP Paribas SA, Citigroup Inc., HSBC Holdings Plc, Mizuho Financial Group Inc., Sumitomo Mitsui Banking Corp., Bank of Nova Scotia and Bank of Tokyo-Mitsubishi UFJ Ltd., the company said.
The term loan reduces the company’s bridge financing for the acquisition to $5.5 billion from $9.5 billion, according to the statement. Bridge loans usually matures in one year and are often used as a backstop to longer-dated debt.
Freeport-McMoRan’s revolving credit line is twice as large as the one it is replacing, according to the statement. Under a revolver, money can be borrowed again once it’s repaid; in a term loan, it can’t.
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