The “proactive” JSE-listed gold major, AngloGold Ashanti, has launched $732,5- million in convertible bonds to refinance debt and for general corporate purposes.

AngloGold Ashanti CFO Srinivasan Venkatakrishnan said: “What we have learnt in the financial markets is that it’s better to be proactive, so we’ll continue to look at all forms of debt refinancing that add most value to the company.”

Issued by its wholly owned subsidiary, AngloGold Ashanti Holdings Finance plc, the bonds flow hot on the heels of AngloGold Ashanti CEO Mark Cutifani posting a set of “milestone” first-quarter results.

It also comes after AngloGold Ashanti recorded an “all-time US dollar earnings high” of $150-million, and after bullish statements on what Cutifani described as “gold’s rebirth”.

The company also expects the initial tranche of $750-million to come in from Newmont for the Boddington deal this quarter, probably in June, plus its $90-million contribution to capital expenditure, and will receive the second $240- million tranche of the Boddington proceeds in the fourth quarter. AngloGold Ashanti expects to receive the proceeds from the sale of its Tau Lekoa gold mine to gold junior Simmer & Jack Mines in the first quarter of 2010.

“We’ve got a much stronger balance sheet than what we had this time last year,” Venkatakrishnan said.

The bonds, which will fall due in 2014, are to refinance a debt, besides other uses. They will pay a coupon of 3,5% and be convertible into AngloGold Ashanti American depositary shares (ADSes), with each ADS currently representing one ordinary AngloGold Ashanti share.

The final terms of the bonds will be announced after the pricing has been determined.

Once the final terms of the bonds have been finalised, AngloGold Ashanti shareholders will be requested to grant specific authority for the directors to issue ordinary shares pursuant to the conversion rights, which will attach to the bonds.

The company will wait till the end of the year before deciding on what to do about dividends.
“We remain committed to paying dividends,” Cutifani said.

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