Summary
Freeport-McMoRan Copper & Gold Inc. (FCX) announced on July 30, 2001, its intention to privately offer $300 million in convertible notes. These notes are scheduled to mature in January 2006 and will be convertible into FCX common stock at a price to be determined. The offering is being made to qualified institutional buyers under Rule 144A, meaning the notes and underlying shares will not be registered with the SEC. The primary use of the net proceeds from this offering will be to reduce FCX's outstanding borrowings under its existing bank credit facilities. To secure the initial interest payments on these notes, a portfolio of U.S. government securities will be pledged, providing a layer of security for early bondholders.
Key Highlights
- 1FCX plans to issue $300 million in convertible notes through a private placement.
- 2The notes will mature in January 2006.
- 3Note holders will have the option to convert the notes into FCX common stock.
- 4The conversion price will be determined at a later date (pricing date).
- 5Proceeds will be used to repay a portion of the company's existing bank debt.
- 6The offering is restricted to Qualified Institutional Buyers (QIBs) under Rule 144A.
- 7An initial security will be provided for the first six scheduled interest payments via U.S. government securities.