Summary
Southern Copper Corporation (SCCO) announced on November 9, 2012, the successful completion of a $1.5 billion registered public offering of debt securities. This offering consisted of two tranches: $300 million in 3.500% Notes due 2022 and $1.2 billion in 5.250% Notes due 2042. The net proceeds, approximately $1.47 billion after expenses and underwriting discounts, are intended for general corporate purposes, including the financing of the company's capital expenditure program. This debt issuance represents a significant move to bolster the company's financial flexibility and fund its growth initiatives. The offering was made under the company's existing shelf registration statement and involved a customary underwriting agreement and supplemental indentures with Wells Fargo Bank, National Association as trustee. Investors should note that the covenants within these indentures place certain limitations on the company's future ability to incur liens, engage in sale and leaseback transactions, and undergo significant corporate restructuring.
Key Highlights
- 1Completion of a $1.5 billion debt offering comprised of 3.500% Notes due 2022 ($300 million) and 5.250% Notes due 2042 ($1.2 billion).
- 2Net proceeds of approximately $1.47 billion after deducting offering expenses and discounts.
- 3Proceeds are earmarked for general corporate purposes, including financing capital expenditures.
- 4The offering was conducted under SCCO's Form S-3 shelf registration statement.
- 5Entered into an Underwriting Agreement with major financial institutions, including HSBC, Morgan Stanley, Credit Suisse, and Merrill Lynch.
- 6Supplemental indentures were executed with Wells Fargo Bank, N.A. as trustee for the issuance of the new notes.
- 7Indenture covenants restrict SCCO's ability to incur certain liens, engage in sale and leaseback transactions, and limit consolidation/merger activities.