Rio Tinto calls $1.72 billion notes, tenders for $781 million more

New York, May 22 – Rio Tinto plc announced plans to use its “strong liquidity position” to reduce debt by a further $2.5 billion.

The company will redeem $1.72 billion of outstanding bonds and tender for a further $781 million of debt securities, according to a news release.

Rio Tinto said the actions follows $7.5 billion of repurchases and redemptions carried out in 2016.

Under the redemption, Rio Tinto called its 9% notes due May 1, 2019 and its 3.5% notes due Nov. 2, 2020 for redemption on June 21. There is a total of $1,719,000,000 of the two series of securities outstanding.

In the tender offer, Rio Tinto will buy up to $780,818,000 of notes from five series of its dollar-denominated debt.

The notes covered by the tender are as follows, listed in descending order of priority:

• The $579,979,000 of 4.125% notes due 2021. Pricing will be set using a spread of 30 basis points over the 1.875% Treasury due April 30, 2022;

• The $627,029,000 of 3.75% notes due 2021. Pricing will be set using a spread of 40 bps over the 1.875% Treasury due April 30, 2022;

• The $460,276,000 of 3.5% notes due 2022. Pricing will be set using a spread of 45 bps over the 1.875% Treasury due April 30, 2022;

• The $513,642,000 of 2.875% notes due 2022. Pricing will be set using a spread of 55 bps over the 1.875% Treasury due April 30, 2022; and

• The $1.2 billion of 3.75% notes due 2025. Pricing will be set using a spread of 70 bps over the 2.375% Treasury due May 15, 2027.

All the prices include an early tender payment of $30.00 per $1,000 principal amount that will only be paid to holders who tender by the early deadline of 5 p.m. ET on June 5.

Pricing will be set at 11 a.m. ET on June 6, and the tender ends at 11:59 p.m. ET on June 19.

Rio Tinto will also pay accrued interest.

Early settlement is planned for June 7 and final settlement for June 20.

Securities will be purchased in order of priority but all notes tendered before the early deadline will be accepted ahead of those tendered after.

The dealer managers are Mizuho Securities USA LLC (866 271-7403, 212 205-7736 or +44 20 7090 6442), Morgan Stanley & Co. LLC (800 624-1808, 212 761-1057 or +44 20 7677 0473) and RBS Securities Inc. (866 884-2071, 203 897-2963 or +44 20 7678 5282)

Global Bondholder Services Corp. (866 807-2200, 212 430 3774 or http://www.gbsc-usa.com/RioTinto) is the depositary and information agent.

Rio Tinto is a mining group based in London.

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