The Fortescue Metals Group Limited (ASX: FMG) share price is trading lower today following an announcement.
At the time of writing, the iron ore producer's shares are down 1% to $20.06.
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What did Fortescue announce?
This morning Fortescue released two announcements relating to raising funds via a bond offering.
The first announcement revealed that the mining giant had launched a bond offering of US$750 million of senior unsecured notes.
Whereas the second announcement revealed not only the successful completion of this bond offering, but the doubling of the amount raised.
According to the release, Fortescue successfully completed a US$1,500 million offering of senior unsecured notes at an interest rate of 4.375%. These notes will mature in April 2031.
The company notes that the transaction was launched at US$750 million but due to strong demand was upsized to US$1,500 million.
Why is Fortescue raising funds?
Fortescue has advised that the proceeds from the offering will be applied to the repayment of its US$750 million 2022 Senior Unsecured Notes.
In addition to this, the funds will be used for general corporate purposes, which may include the repayment of debt.
Fortescue's Chief Executive Officer, Ms Elizabeth Gaines, was pleased with the success of the offering.
She said: "Fortescue continues to deliver outstanding operational and financial performance which underpins our ongoing support from the US Debt Capital Markets. Our balance sheet is structured on low cost, investment grade terms, maintaining flexibility to support ongoing operations and the capacity to fund future growth."
This sentiment was echoed by Fortescue's Chief Financial Officer, Mr Ian Wells.
He said "The successful completion of this offering will refinance our earliest debt maturity, extend our weighted average maturity on terms consistent with our existing debt and further optimises Fortescue's capital structure. Our disciplined capital allocation framework provides for investment in future opportunities and the continued delivery of value to our investors."
