Summary
Freeport-McMoRan Inc. (FCX) announced on March 30, 2011, the entry into a new five-year, senior unsecured revolving credit facility totaling $1.5 billion. This facility, effective until March 30, 2016, replaces existing credit agreements set to expire in March 2012. The new credit line provides financial flexibility for FCX and its subsidiary, PT Freeport Indonesia (PTFI), with PTFI's borrowing capacity capped at $500 million. This move is significant as it secures a substantial source of liquidity for the company for an extended period. The unsecured nature of the facility and the potential for interest rate adjustments based on FCX's credit ratings suggest confidence in the company's financial standing at the time. Investors should note that the collateral under the previous agreements will be released, and the obligations are not guaranteed by other subsidiaries, though this can be designated later.
Key Highlights
- 1FCX entered into a new $1.5 billion senior unsecured revolving credit facility on March 30, 2011.
- 2The new credit facility has a maturity date of March 30, 2016 (five-year term).
- 3This facility replaces existing credit agreements that were scheduled to expire in March 2012.
- 4PT Freeport Indonesia (PTFI), a subsidiary, has a borrowing capacity limited to $500 million under the new facility.
- 5The credit facility is available for letters of credit and loans.
- 6Collateral under previous credit agreements will be released.
- 7Interest rates will be based on adjusted LIBOR or alternate base rate plus a spread determined by FCX's credit ratings.