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Freeport-McMoRan Copper & Gold Inc. Prices $6.5 Billion In Private Placement Of Senior Notes

Freeport-McMoRan Copper & Gold Inc. (NYSE: FCX) announced today the pricing of $6.5 billion of senior notes in four tranches, consisting of 5-year, 7-year, 10-year and 30-year senior notes. Following is a summary of the four new tranches of debt, which will have an aggregate weighted interest cost of approximately 3.9%:
 

Description
   

Amount
   

Maturity
2.375% Senior Notes (1)     $1.5 Billion     Due March 15, 2018
3.100% Senior Notes (2)     $1.0 Billion     Due March 15, 2020
3.875% Senior Notes (3)     $2.0 Billion     Due March 15, 2023
5.450% Senior Notes (4)     $2.0 Billion     Due March 15, 2043

(1) Priced at 99.990% to yield 2.377%

(2) Priced at 99.962% to yield 3.106%

(3) Priced at 99.941% to yield 3.882%

(4) Priced at 99.544% to yield 5.481%
 

The sale of the senior notes is expected to settle on March 7, 2013, subject to customary closing conditions. FCX intends to use the net proceeds from the offering, together with the net proceeds of its term loan, primarily to fund the Plains Exploration & Production Company (PXP) and McMoRan Exploration Co. (MMR) acquisitions, including for the payment of cash consideration for the acquisitions and the repayment of certain indebtedness of PXP. If the PXP acquisition does not close, FCX will be required to redeem all of the outstanding 7-year, 10-year and 30-year notes at 101% plus accrued and unpaid interest. As previously announced, PXP and MMR stockholder meetings to approve the acquisitions will be held after the U.S. Securities and Exchange Commission has declared effective the respective registration statements on Form S-4 filed in connection with the acquisitions. The transactions are expected to close in second-quarter 2013.

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