JOHANNESBURG (miningweekly.com) – Gold major AngloGold Ashanti has entered into a $1-billion term-loan facility agreement with Standard Chartered Bank to refinance its convertible bond.

The gold producer on Friday reported that the term facility was available to be drawn during February, so as to repay its $1-billion convertible bond, which was to be paid on February 27.

"During our third-quarter earnings release, we said that we would be proactively addressing the refinancing of our convertible bond, and we are pleased that we have secured the refinancing well in advance of the convertible bond becoming due and without seeking further support from our shareholders," CEO Mark Cutifani said in a statement.

The term facility was for an initial one-year period from the first drawdown in February, but was extendable to November 30, 2010, if required by the gold producer.

AngloGold Ashanti stated that the terms and covenants of the facility were similar to those of its existing $1,15-billion revolving credit facility, except that the amounts drawn under the term facility would bear an interest margin of 4,25% for the first six months after the first drawdown and 5,25% thereafter.

"The terms of the Standard Chartered facility will, at a time when liquidity is scarce and markets are uncertain, improve our financial flexibility and provide management with additional time to secure a longer-term, cost-effective refinancing while continuing to optimise and enhance operations and grow cash flow," said Cutifani.

"We are delighted to be the mandated lead arranger for this transaction and to play our part in continuing to assist the sustainable economic development of all the countries we operate in," commented Standard Chartered Bank head of origination of client coverage in Africa Anil Dua.

To subscribe to Mining Weekly's print magazine email subscriptions@creamermedia.co.za or buy now.