In order to reduce its debt, Rio Tinto has announced a USD2.5 billion bond purchase programme.
To execute the bond purchase programme, Rio Tinto has issued a redemption notice for approximately $1.72 billion of its 2019 and 2020 US dollar-denominated notes and commenced cash tender offers to purchase up to approximately $781 million of its five 2021, 2022 and 2025 US dollar-denominated notes.
The group said the announcement is part of its ongoing capital management plan and follows the successful completion of a series of $7.5 billion US dollar-denominated note redemptions and repurchases in 2016.
The aggregate amount of each series of Securities that is purchased will be subject to the Maximum Tender Amount of $780,818,000, with the Acceptance Priority Level 1 being the highest and Acceptance Priority Level 5 being the lowest, provided that any Securities tendered at or prior to the Early Tender Deadline will be accepted for purchase in priority to any Securities tendered after the Early Tender Deadline, even if such Securities tendered following the Early Tender Deadline have a higher Acceptance Priority Level than Securities tendered on or prior to the Early Tender Deadline. If the Offer is oversubscribed, then the Securities will be subject to proration as described in the Offer to Purchase.
The Companies may elect after the Early Tender Deadline and at or prior to the Expiration Date to accept the Securities validly tendered at or prior to the Early Tender Deadline. If the Companies exercise this right, the Securities tendered prior to the Early Tender Deadline and accepted for purchase will be settled promptly thereafter, expected to be on or about 7 June 2017. If this right is not exercised, all Securities tendered in the Offer and accepted for purchase will be settled promptly after the Expiration Date, expected to be on or about 20 June 2017.
Rio Tinto disclosed that Mizuho Securities USA LLC, Morgan Stanley & Co. LLC and RBS Securities Inc., are dealer managers for the programme.
