In a show of confidence from investors, Mineral Resources (ASX:MIN) has increased its US bond offering to $1.1 billion from the original $850 million and successfully sold the entire offering. The senior unsecured bonds, with an attractive yield of 9.25% and a maturity date of 2028, will be settled next Tuesday in New York.
MinRes intends to utilise the proceeds from the bond issuance for general corporate purposes, including capital expenditures. This move will raise MinRes’s total US dollar debt maturing from 2027 to 2030 to approximately $3.15 billion.
The expansion of the US dollar offering has resulted in an increase in the Australian dollar size of the offering, now standing at around $1.7 billion, up from just over $1.3 billion initially.
As of June 30, MinRes held cash reserves of $1.4 billion, marking a 43% decrease over the year. However, after the settlement next Tuesday, the company will have more than $3 billion in cash, pushing gross debt to nearly $4.9 billion and leaving net debt at approximately $2.8 billion.
During the fiscal year ending June 30, the company invested $1.761 billion in capital expenditures. This figure is forecasted to surge in the current financial year to $2.75 billion, with more than $2.2 billion allocated to the Onslow iron ore project.