Rio Tinto prices US$5billion of fixed rate bonds

Rio Tinto has priced US$2.5 billion of 5-year, US$1.75 billion of 10-year and US$750 million of 20-year SEC registered securities. The bonds were issued by Rio Tinto Finance (USA) Limited, with payment of principal and interest fully guaranteed by Rio Tinto plc and Rio Tinto Limited. The 5-year notes pay a coupon of 5.875% and will mature on 15 July 2013. The 10-year notes pay a coupon of 6.50% and will mature on 15 July 2018. The 20-year notes pay a coupon of 7.125% and will mature on 15 July 2028. Rio Tinto’s Chief Financial Officer Guy Elliott commented: “The success of this bond issue underlines the financial strength and asset quality of Rio Tinto. Last year we raised US$38 billion of debt to buy Alcan, creating a world leading business in aluminium. It had always been our intention to repay the debt from our strong cash flows and from asset disposals and to term out the debt as the opportunity arises. “Our disposal programme remains firmly on track, and cash flows are continuing to run strongly – as this week’s iron ore price settlement reflects.” Credit Suisse, Deutsche Bank Securities, JPMorgan, Morgan Stanley and RBS Greenwich Capital were joint book-running managers. Société Généralé was lead manager. ANZ Securities, Inc; Banco Bilbao Vizcaya Argentaria, S.A.; Calyon; Daiwa Securities America Inc.; Mitsubishi UFJ Securities and Mizuho International plc were co-managers. Proceeds from this issuance will be used to repay bank debt drawn for the Alcan acquisition. Source: Rio Tinto