Fortescue's $4.3 billion Debt Financing Deal

Submitted by Share Trading on 20 September, 2012 - 09:34

After facing debt turmoil Fortescue Metals (ASX:FMG)is awarded a new debt financing deal from Credit Suisse and JPMorgan.

  • $US4.5 billion (AUD$4.3 billion) debt facility refinancing deal is underwritten by Credit Suisse and JPMorgan.
  • SMH reports that Deutsche Bank's analysts estimated Fortescue now had available funds of $US6.7 billion after the deal.
  • The analysts also noted that they calculated an "all-in cost of $US65" including royalties, shipping and corporate costs. Factoring in interest which would cost an additional "$US8 a tonne." They then estimated that Fortescue makes "a circa $US12 a tonne margin." Furthermore they postulated that if capital expenditure was included at about "$US20 a tonne - Fortescue was cash flow negative."
  • Fortescue market capitalisation is at $11.5 billion.
  • Fortescue has total debts of $US 10.4 billionas at June 30.
  • Fortescue Metal's Andrew Forrest was previously involved with Anaconda Nickel, which in 2003 was forced to sell shares to meet debt repayments.
  • Two weeks ago, iron ore prices touched on $US 87 per tonne, which has now since recovered back up to $US 109.60 on Tuesday.