South32 prices $700m in notes to help settle Sierra Gorda acquisition
The 10-year notes will carry an annual interest rate of 4.35%, and be used to settle a bridging facility used to acquire a stake in the Chilean mine
Diversified miner South32 has announced the pricing of a $700m (R10.3bn) 10-year bond programme, its first in US dollars, that will help fund its recent acquisition of a 45% stake in the Sierra Gorda copper mine in Chile.
The notes will carry an annual interest rate of 4.35% per annum, to be paid biannually in April and October, with the settlement of the offering expected on April 14.
South32 has a primary listing in Australia and a secondary listing on the JSE, and was unbundled from BHP in 2015. The group completed the sale of its SA coal assets to Seriti in 2021, and has been on a drive to bulk up its footprint in green metals, or those that will be in demand during a global transition to a lower-carbon future.
Copper is a key example of such metals, as its conductivity means it is used extensively in electric vehicles, as well as supporting infrastructure.
South32 had announced the acquisition of the stake in the mine in northern Chile in October and completed it in February, paying $1.4bn upfront. It will use the proceeds from bonds, along with cash, to settle an $800m bridging facility it used for the transaction.
“We are pleased that our strong financial position and disciplined approach to capital management has been recognised by investors with the successful execution of our inaugural US dollar bond issue,” said CFO Katie Tovich in a statement.