Australian Stocks Consolidate, Fortescue Restructures $4.5 Billion Debt

Marcus Jacob
18 Sep, 2012
New York City

Australian markets consolidated gains. Fortescue Metals won debt refinancing for its $4.5 billion debt portion and delayed its earliest payment to November 2015 as iron ore prices slide and the outlook remains uncertain.

[R]7:30 PM Sydney – Australian markets consolidated gains. Fortescue Metals won debt refinancing for its $4.5 billion debt portion and delayed its earliest payment to November 2015 as iron ore prices slide and the outlook remains uncertain.[/R]

Australian markets consolidated gains after a week of surge and investors worried about the rising tensions linked to East China Sea islands.

Japanese companies requested executives to avoid public places in China as diplomatic rift between the two nations linked to the disputed islands lead to public protests.

The ASX 200 index edged lowered 7.80 to 4,394.70 and the broader All Ordinaries slid 4.02 to 4,417.82.

Stock Movers

Fortescue Metals 17% or 51 cents to $3.50 after the third largest iron ore miner resumed trading and secured US$4.5 billion debt refinancing facility from JP Morgan and Credit Suisse that will have fewer financial covenants than in the previous debt arrangement.

The new debt facility will delay the earliest payment to November 2015 and the coupon rate of 5%, 200 basis points lower than its unsecured debt.

The fees paid by the company is the subject of intense speculation among analysts and investors and the Ticker research, our sister publication estimated the fees higher than 2% of the total debt.

BHP Billiton Limited slumped 19 cents to $33.96 and, Rio Tinto Limited dropped 25 cents to $57.25. Lynas Corporation Limited added 1 cent to 89 cents and Iluka Resources declined 45 cents to $10.90.

Mirabela Nickel increased 1.4% to 37 cents and Newcrest Mining decreased 7 cents to $29.05. Kingsgate added 2 cents to $5.52 and Whitehaven Coal down 1 cent to $3.04.

Precious metals miners closed mixed after the spot price of gold dropped $12.01 to $1,769.95 in U.S. dollars.

Transfield Services up 1 cent to $1.76; engineering contractors WorleyParsons slumped 26 cents to $27.25 and Monadelphous Group declined 45 cents to $19.40.

Oil Search Limited decreased 14 cents to $7.72 and Santos Limited slipped 8 cents to $11.94 and Woodside Petroleum dropped 30 cents to $34.60. Sundance Energy added 1 cent to 75 cent.

Seven West Media lowered 2 cents to $1.24, Ten Network closed unchanged at 35 cents and Fairfax Media slid 1 cent to 46 cents and the controversial News Corp. gained 9 cents to $23.80.

Harvey Norman Holdings closed unchanged at $2, Woolworths decreased 6 cents to $28.50 and Kathmandu closed unchanged at $1.39.

David Jones Limited increased 4 cents to $2.27 and Wesfarmers slipped 11 cents to $34.42. Billabong International Limited closed unchanged at $1.45. Breville Group gained 4 cents to $5.26.

Commonwealth Bank of Australia closed unchanged at $55.29 and Bank of Queensland down 1 cent to $7.77. ANZ closed unchanged at $24.39. National Australia Bank gained 8 cents to $25.56 and Westpac Banking Corporation slipped 7 cents at $24.35.

Macquarie Group dropped 33 cents to $29.12 and Perpetual Limited declined 31 cents to $27.34.

Toll Holdings slumped 22 cents or 4.6% to $4.53, Leighton plummeted 31 cents to $16.74, and property developer Mirvac Group slid 1 cent to $1.43.

Qantas closed unchanged at $1.25; Flight Centre gained 5 cents to $23.91 and Virgin Australia closed unchanged at 42 cents.

QR National added 2 cents to $3.42 and Telstra up 1 cent to $3.80.