Freeport-McMoRan secures $7bn financing for energy acquisitions
TORONTO (miningweekly.com) – New York-listed miner Freeport-McMoRan Copper & Gold on Tuesday said it had secured $7-billion in debt financing to help fund its acquisition of oil and gas energy assets.
The Phoenix, Arizona-based company said it had reached agreements with two bank syndicates providing committed financing for a $4-billion bank term loan and a new $3-billion revolving credit facility to buy Plains Exploration & Production (PXP) and McMoRan Exploration (MMR) in deals worth a combined $9-billion.
The term loan would be drawn at the closing of the acquisitions, which is expected during the second quarter and would be used to fund the cash portion of the acquisitions, refinancing of debt outstanding at PXP and MMR among other possible uses.
The loan would mature five years from the date of the first borrowing and would bear interest determined by reference to Freeport’s credit ratings and the London interbank lending rate.
Freeport said lender commitments under its acquisition bridge facilities have been reduced from $9.5-billion to $5.5-billion for the term loan.
A new five-year $3-billion revolving credit facility would replace an existing $1.5-billion revolving credit facility on completion of the PXP transaction.
Freeport in December said it would acquire PXP and MMR in two separate cash-and-stock deals with a combined worth of about $9-billion, or $20-billion if assumed debt is also accounted for.
Freeport’s NYSE-listed stock traded at $34.44 apiece on Tuesday morning.
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