Friday 06 May 2016 by Company updates

Fortescue repays bank debt

On 4 May 2016, Fortescue Metals Group (FMG) issued a repayment notice for US$650m of a senior secured term loan due in 2019

FMG truck

This reduction in senior secured bank debt is in addition to the US$577m of senior unsecured debt announced on 27 April 2016.  On 16 May 2016, the term loan will be repaid using cash on its balance sheet.  FMG calculates that this will generate net interest savings of US$28m per annum.

So far in 2016, including the above two repayments, FMG has now reduced debt by US$2.3bn. The company estimates that it has saved interest of about US$164m per annum.

FMG now has US$4.2bn of debt due in CY2019 and US$2.6bn in CY2022.

This article is written by Mark Bayley.  The lead credit analyst, Alen Golubovic will add his comments when he returns from holiday.

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