8-KOther EventsExhibits & Filings

SOUTHERN COPPER CORP/ 8-K Report, Corporate Update (May 5, 2006)

Filed May 5, 2006For Securities:SCCO

Summary

Southern Copper Corporation (SCCO) filed an 8-K on May 4, 2006, to report on a significant debt financing event. The company announced the pricing of an additional offering of US$400 million in 7.500% coupon Notes due 2035. This offering was conducted under Rule 144A and Regulation S of the Securities Act of 1933, indicating a private placement to qualified institutional buyers and non-U.S. persons. The closing of this debt issuance is scheduled for May 9, 2006. This move suggests that Southern Copper is seeking to raise capital, likely to fund ongoing operations, expansion projects, or general corporate purposes, which is a common strategy for mining companies to finance significant capital expenditures. Investors should monitor how these new funds are deployed and their impact on the company's leverage and future growth prospects.

Key Highlights

  • 1SCCO priced an additional offering of US$400 million in debt.
  • 2The new debt consists of 7.500% coupon Notes due in 2035.
  • 3The offering was made pursuant to Rule 144A and Regulation S.
  • 4The transaction is expected to close on May 9, 2006.
  • 5This filing serves as notification of a material event related to the company's financing activities.
  • 6The press release announcing the pricing is attached as an exhibit.

Frequently Asked Questions

This 8-K filing is to report the pricing of a new debt offering by Southern Copper Corporation. Specifically, the company has priced US$400 million of 7.500% Notes due 2035.

The offering is structured under Rule 144A and Regulation S. Rule 144A pertains to the resale of restricted securities to Qualified Institutional Buyers (QIBs) in the U.S., while Regulation S governs offerings to persons outside the U.S. This suggests the debt is being placed with institutional investors and non-U.S. purchasers, not the general public.

The transaction for the US$400 million in Notes is expected to close on May 9, 2006.

The 7.500% coupon rate indicates the annual interest that Southern Copper will pay on the US$400 million principal amount of the Notes until their maturity in 2035. This rate reflects market conditions and the company's credit risk at the time of pricing.