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Wednesday, March 14, 2012 9:09:50 AM
7:09p ET March 13, 2012 (Dow Jones) UPDATE: Fortescue Metals Launches $1 Billion High-Yield Bond
--Fortescue launches US$1 billion high-yield bond offering
--The offering will help fund the expansion of its iron-ore operations
--Other major mining companies have tapped bond markets in recent months
(Adds detail in the first to third paragraphs, background from fifth paragraph)
By Robb M. Stewart
Of DOW JONES NEWSWIRES
MELBOURNE (Dow Jones)--Fortescue Metals Group Ltd. (FMG.AU) said Wednesday it plans to raise US$1 billion with a high-yield bond offering to help fund the expansion of its iron-ore operations in Western Australia.
The Perth-based company in a statement said it and its subsidiaries have launched a bond offering of senior unsecured notes. A spokesman declined to give further details.
The money will be used to help fund Fortescue's plans to expand its production capacity in the remote Pilbara region to 155 million metric tons a year of the steelmaking commodity by mid-2013 from about 55 million tons currently, including the purchase of trucks, excavators, light vehicles and other equipment.
Fortescue was formed in 2003 and began construction of its first mining, port and rail operations in 2006, but has quickly grown to become Australia's third-largest producer of iron ore after Rio Tinto PLC (RIO) and BHP Billiton Ltd. (BHP).
BHP last month raised US$5.25 billion in a five-part bond offering, having raised US$3 billion three months earlier. Rio in September priced US$2 billion in five-, 10- and 30-year bonds.
Fortescue last sold bonds in October when it issued US$1.5 billion of 8.25% eight-year senior unsecured notes.
-By Robb M. Stewart, Dow Jones Newswires; +61 3 9292 2094; robb.stewart@dowjones.com
(END) Dow Jones Newswires
03-13-12 1909ET
Copyright (c) 2012 Dow Jones & Company, Inc.BT201203130110072012-03-13 23:09:00.0001S2RU89T921BEV0AFAM01U6DDCDJNF
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