Summary
Freeport-McMoRan Inc. (FCX) has announced significant amendments to its senior secured credit facilities. The company has successfully refinanced its term debt, reducing senior secured term debt from $4.4 billion to $2.45 billion and achieving substantial interest cost savings of approximately 0.75 percent per annum. This strategic move involved establishing new credit facilities totaling $3.95 billion, comprising a $1.5 billion revolving credit facility and a $2.45 billion term loan A, which was used to fully repay existing term loan B obligations.
Key Highlights
- 1FCX amended its senior secured credit facilities, totaling $3.95 billion.
- 2The new facilities include a $1.5 billion revolving credit facility and a $2.45 billion term loan A.
- 3Proceeds from the term loan A were used to fully repay existing term loan B.
- 4The refinancing is expected to result in interest cost savings of approximately 0.75% per annum.
- 5The credit facilities are guaranteed by most of FCX's material domestic and certain foreign subsidiaries, including PT Freeport Indonesia for specific revolving loans.
- 6Obligations are secured by subsidiary stock, intercompany indebtedness, and certain deposit/investment accounts, with specific assets of PT Freeport Indonesia securing certain revolving loans.
- 7The amendments include covenants that restrict additional indebtedness, liens, sale and leaseback transactions, mergers, asset sales, and, until investment-grade ratings are achieved, dividend payments and prepayments of certain notes.