Fortescue secures $3b yuan-denominated loan
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The news: Fortescue has secured a yuan-denominated syndicated term loan, which the iron ore miner says is the first of its kind to an Australian corporation, as executive chairman Andrew Forrest hails an alignment in decarbonisation ambition with China.
The numbers: The syndicated term loan facility totals 14.2 billion yuan, which is about $3.03 billion, and has a tenor of five years. The loan can be drawn down over a period of 12 months.
The interest rate of the loan is fixed at 3.8% per annum while a principal repayment of 0.5% must be made every six months, in arrears commencing 18 months after financial close.
The context: Funding will be used for “general corporate purposes” including partnering with Chinese suppliers, according to Fortescue’s announcement to the exchange.
The facility includes participation from Chinese, Australian and international lenders according to Fortescue.
The loan was arranged by the Sydney branches of the Bank of China and the Industrial and Commercial Bank of China.
What they said: “This isn’t just a financial transaction. It’s a signal of what is possible when partners are aligned in ambition,” Andrew Forrest said.
“As the United States steps back from investing in what will be the world’s greatest industry, China and Fortescue are advancing the green technology needed to lead the global green industrial revolution.
“China continues to lead the world in industrial scale and innovation. Fortescue shares that ambition and drive. This landmark RMB financing strengthens our long-standing partnerships with Chinese institutions and opens new frontiers for collaboration.”
The source: ASX
