Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Canadian miner giant Teck Resources (TSX:TCK.B) has priced a $1 billion, two-part bond deal featuring seven-year and 30-year maturities in the U.S. credit markets, announced Thursday.
In a statement, the company informed it would issue US$1.00 billion in aggregate principal amount of notes, consisting of US$500 million aggregate principal amount of 3.000% notes due 2019 and US$500 million aggregate principal amount of 5.200% notes due 2042.
The notes being offered will be unconditionally guaranteed on a senior unsecured basis by Teck Metals Ltd., a wholly owned subsidiary of Teck. The offering is expected to close on or about February 28, 2012, subject to customary closing conditions. Teck expects to receive aggregate net proceeds of approximately US$987 million from the offering, after deducting underwriting fees and estimated offering expenses.
The new senior unsecured notes will be guaranteed by Teck Metals Ltd and will rank pari passu with Teck’s other senior unsecured debt. They are expected to be rated Baa2 by Moody’s Investors Service and BBB by Standard & Poor’s and Fitch Ratings. Payments are guaranteed by Teck Metals Ltd., a subsidiary.
The new notes are being offered via an underwritten public offering in the United States pursuant to an effective shelf registration statement on Form F-9 filed with the US Securities and Exchange Commission and in Canada on a private placement basis.
The Vancouver-based natural resources producer plans to use the proceeds to redeem $530 million of 9.75% senior notes due 2014, and some of the $1.043 billion outstanding of 10.75% senior notes due 2019.
