Mining conglomerate Noranda (NRD-T) intends to sell US$350 million worth of unsecured debentures in order to repay existing notes.
Net proceeds are mainly earmarked for US$300 million worth of existing debentures that mature in June. Those notes have been bearing interest at 8.125% annually, notably higher than the 6%-coupon rate attached to the new ones.
The notes will be redeemable at anytime prior to maturity, scheduled for Oct. 15, 2015. An early redemption requires the repayment of principal plus a make-whole premium.
The debt-financing all but ensures that Noranda surpasses its goal of raising $1 billion in new capital. The program, launched in late July, has already seen it issue $113 million more in equity than had been planned.
Noranda embarked on the program in order to ensure sufficient liquidity to wade through its heavy debt. At mid-year, the company owed $4.5 billion, including $567 million then due in one year’s time.
Working capital stood at $1.1 billion.
Citigroup and Barclay’s Capital are co-leading the debt financing.
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