Iron ore firm to raise funds in EU

Published Apr 23, 2015

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BHP BILLITON is selling bonds in euros as the biggest mining company becomes the latest in a line of non-European borrowers to raise funds in the region.

BHP Billiton will sell a maximum of e500 million (R6.1 billion) of five-year notes, as well as securities that mature in 2022 and 2030, according to a person familiar with the matter, who asked not to be identified because they are not authorised to speak publicly.

BHP Billiton, like China Petrochemical and Coco-Cola of the US, is seeking to take advantage of borrowing costs driven to near-record lows amid the European Central Bank’s bond-buying stimulus programme.

The average yield on investment grade debt in euros was 0.89 percent on Tuesday, after reaching a record low 0.85 percent on March 10.

The company is selling five-year floating-rate notes to yield 40 basis points over the euro interbank offered rate, according to the person familiar with the matter.

Its securities due in October 2022 would pay a spread of about 55 basis points above benchmark rates and the 15-year notes would carry a premium of about 90 basis points, the person said.

The Melbourne-based company last sold bonds in euros in April 2013, data show.

BHP officials based in London could not immediately comment on the bond sale. – Bloomberg

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