By Patrick McGee
International mining giant Freeport-McMoRan Copper & Gold
Inc. (FCX) is selling the biggest bond deal of 2013 on
Thursday.
The Phoenix-based company is raising cash in connection with the
$6.9 billion acquisition of Plains Exploration & Production Co.
(PXP), as announced Dec. 5.
The $6.5 billion, four-part bond deal is the largest corporate
bond offering in the U.S. since November, when pharmaceutical
company AbbVie Inc. (ABBV) borrowed $14.7 billion. It is also the
company's largest offering, surpassing the $6 billion deal it
priced in March 2007, per Dealogic.
The deal features $1.5 billion of five-year notes, $1 billion of
seven-year notes, $2 billion of 10-year bonds and $2 billion of
30-year bonds. The extra yield the bonds pay, compared with
similar-maturity Treasurys, ranges from 1.625 percentage points on
the five-year notes to 2.375 points on the 30-year bonds. They are
expected to be rated Baa3 by Moody's Investors Service and BBB by
Standard & Poor's Ratings Services and Fitch Ratings.
Bondholder protections include a change-of-control option that
gives investors the right to redeem the bonds at 101% of face value
should the company be acquired and downgraded below investment
grade.
Write to Patrick McGee at patrick.mcgee@dowjones.com
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