Rio Tinto to Buy Back $1.5 Billion of Bonds Due in 2017 and 2018by
Rio Tinto Group, the world’s second-largest mining company, will buy back as much as $1.5 billion of bonds maturing in the next two years as it seeks to reduce its debt load, the company said in a statement Thursday.
The move is the latest sign that companies battered by the commodities rout at the start of the year are shoring up their balance sheets. Rio Tinto is offering cash through April 27 to purchase its $500 million of 2 percent notes due 2017 and $1.25 billion of 1.625 percent bonds maturing the same year.
If the company buys less than $1.5 billion in principal from the 2017 notes it will offer to buy bonds maturing in 2018. Rio Tinto is targeting its $1.75 billion of 6.5 percent bonds due that year and $1.25 billion of 2.25 percent notes through May 18.
Rio Tinto laid out plans for spending cuts in February that included slashing its dividend in response to plunging commodity prices. But that didn’t prevent Moody’s Investors Service from lowering its ratings for the miner on Feb. 24 to Baa1, the third-lowest investment-grade rank.