According to a preliminary prospectus filed with US security regulators on Wednesday, the Phoenix, Arizona-based company expects to offer yet-to-be-priced notes due in 2028 and 2030. Freeport will use the net proceeds of the offering, and if necessary, cash on hand or available liquidity, to buy back its 4% notes due in 2021, 3.55% notes due in 2022, 3.875% notes due in 2023 and 4.55% notes due in 2024.
The company said it might also consider using a portion of the remaining proceeds to redeem or buy all or a portion of the remaining 2021 notes not tendered under the offer.
The four series of outstanding notes together carry an outstanding value of $850 million and Freeport is offering $1,007.66, $993.75, $1,005.00 and $1,040.00 per $1,000 principal for each respective series of notes tendered, excluding unpaid interest.
Each offer will expire on March 17, unless extended or cancelled. The company has fixed an early tender deadline on March 3, with notes successfully tendered by this time attracting an added premium of $30 per $1,000 principal amount.
As at December 31, Freeport's consolidated debt totalled $9.8 billion and its cash balance stood at $2 billion. The company had no borrowings and $3.5 billion available under its revolving credit facility.
JP Morgan Securities, BofA Securities, BNP Paribas Securities Corp, Citigroup Global Markets, HSBC Securities (USA), Mizuho Securities USA, SMBC Nikko Securities America, BMO Capital Markets, MUFG Securities Americas and Scotia Capital (USA) are the joint book-running managers for the offering, with JP Morgan acting as the lead left book-running manager.
Credit Suisse rates Freeport equity (Nasdaq:FCX) as 'underperform', while BMO Capital Markets analysts recently raised their target price from $12.00 to $17.00.
Shares were trading up 0.75% on Wednesday at $12.11, capitalising the company at $17.5 billion.
