Anglo American Said to Seek $5 Billion Loan to Refinance DebtStephen Morris
Anglo American Plc, the world’s largest platinum producer, is seeking $5 billion of loans to refinance debt two years early, according to two people with knowledge of the matter.
The five-year credit line will pay an initial interest margin of 70 basis points more than the London interbank offered rate, said the people, who asked not to be identified because the deal is private. Mizuho Financial Group Inc. and Commerzbank AG have been hired by the London-based miner to coordinate the deal, they said. A basis point is 0.01 percentage point.
Lenders are being asked to contribute $250 million each to the loan in a club-style syndication, and must commit to the facility within the next two weeks, the people said. The transaction will replace debt including a $3.5 billion revolving credit due in 2015, they said. Under a revolver, money repaid can be borrowed again.
James Wyatt-Tilby, a London-based spokesman for Anglo American, declined to comment on the loan. “We go into the market to refinance our debt when it makes sense to do so,” he said.
The interest rate on the loan is linked to the company’s credit rating, the people said. Anglo American is rated Baa1 by Moody’s Investors Service, the third-lowest investment-grade, and an equivalent BBB+ by Standard & Poor’s and Fitch Ratings, according to data compiled by Bloomberg.
Anglo American posted a $1.5 billion full-year loss for 2012 after a $4.6 billion writedown at its biggest project, the company said Feb. 15. Chief Executive Officer Cynthia Carroll departs next month after resigning in the wake of delays at the Brazilian mine and will be replaced by AngloGold Ashanti Ltd. CEO Mark Cutifani in April.
The financing was reported earlier by Reuters.