Rio Tinto completes gross debt reduction programme
Rio Tinto has successfully completed its bond tender and redemption exercises announced on 20 March 2018 and as a result it has reduced gross debt by $1.94 billion equivalent. Since the start of 2016 we have now reduced the nominal value of our outstanding bonds from approximately $21 billion equivalent to about $7.8 billion equivalent.
The notes redeemed by Rio Tinto Finance (USA) plc and Rio Tinto Finance (USA) Limited under the $1.4 billion redemption notices in addition to the the notes purchased by Rio Tinto Finance plc of €432 million under the tender offer amounted to $1.94 billion equivalent are detailed below.
|Title of Security||Issuer and Offeror||CUSIP/ISIN||Principal Amount |
|2.000% Notes due May 2020||Rio Tinto Finance plc||XS0863129135||€348,340,000||€1,046.74 (3)||tender|
|4.125% Notes due 2021||Rio Tinto Finance (USA) Limited||767201AN6/ US767201AN61||$435,794,000||$1,040.64 (2)||redemption|
|3.750% Notes due 2021||Rio Tinto Finance (USA) Limited||767201AQ9/ US767201AQ92||$353,100,000||$1,027.89 (2)||redemption|
|3.500% Notes due 2022||Rio Tinto Finance (USA) plc||76720AAC0/ US76720AAC09||$228,661,000||$ 1,024.90 (2)||redemption|
|2.875% Notes due 2022||Rio Tinto Finance (USA) plc||76720AAF3/ US76720AAF30||$382,553,000||$1,001.15 (2)||redemption|
|2.875% Notes due Dec 2024||Rio Tinto Finance plc||XS0863127279||€83,300,000||€1,152.03 (3)||tender|
(1) Settlement of 2.000% Notes due 2020 and 2.875% Notes due 2024 was on 29 March 2018. Settlement of 4.125% Notes due 2021, 3.750% Notes due 2021, 3.500% Notes due 2022 and 2.875% Notes due 2022 was on 19 April 2018.
(2) Per $1,000 principal amount of notes under the redemption notice.
(3) Per €1,000 principal amount of notes validly tendered and accepted for purchase.
Capitalised terms in this announcement have the same meaning as assigned to them in the Tender Offer Memorandum dated 20 March 2018. The Notes purchased and redeemed have been cancelled.
The early redemption costs are expected to reduce earnings before tax by approximately $90 million and cash flow from operating activities by approximately $80 million in the first half of 2018. These reductions will be offset by savings in future periods.