AngloGold Plans to Buy Back $475 Million of High-Yield Bonds

  • Miner to use cash, credit facilities to repurchase notes
  • AngloGold bought back $775 million on the bonds in 2015

AngloGold Ashanti Ltd., the world’s third-largest miner of the metal, said it plans to redeem about $475 million outstanding on a $1.25 billion high-yield bond that was issued in 2013.

AngloGold will pay $1,063.75 for every $1,000 of bonds, exercising the notes’ call option, the Johannesburg-based company said in a statement Tuesday. The coupon on the debt is 8.5 percent and the sum outstanding attracts an interest charge of $40 million a year, spokesman Stewart Bailey said by phone.

Gold, a haven in times of economic turmoil, has soared 24 percent this year to $1,314.73 an ounce as the U.S. dialed back expectations for increasing interest rates, growth stalled in China and the U.K.’s vote to leave the European Union injected fresh uncertainty into global markets. That’s helped AngloGold’s revenue, while the lower South African rand since the start of 2015 has reduced costs.

AngloGold will use its $1 billion revolving-credit facility and excess cash to repay the bonds, it said. Last year, the company sold its Cripple Creek & Victor mine in the U.S. to Newmont Mining Corp. to fund the repurchase of $775 million of the high-yield bonds.

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