Rio Tinto prices tender offer for 6.5% notes, 2.25% notes due 2018

By Angela McDaniels

Tacoma, Wash., June 13 – Rio Tinto Finance (USA) plc and Rio Tinto Finance (USA) Ltd. determined the prices they will pay in their any-and-all tender offer for two series of notes guaranteed by Rio Tinto plc and Rio Tinto Ltd.

Rio Tinto Finance (USA) Ltd. will pay $1,108.33 per $1,000 principal amount of its $1,669,802,000 of outstanding 6.5% notes due 2018, and Rio Tinto Finance (USA) plc will pay $1,024.36 per $1,000 principal amount of its $1,189,523,000 of outstanding 2.25% notes due 2018.

Holders will also receive accrued interest.

Pricing was set at 11 a.m. ET on June 13 by reference to the 0.875% Treasury due May 31, 2018 plus a fixed spread of 50 basis points. The reference yield is 0.724%.

The any-and-all tender offer was set to end at 5 p.m. ET on June 13. Settlement is expected to occur on June 14.

Maximum tender offer

In addition to the any-and-all tender offer, the companies are offering to buy back a maximum amount of five other series of notes in a separate tender offer.

In the maximum tender offer, the companies will purchase an aggregate principal amount of up to $3 billion less the amount of notes purchased in the any-and-all tender offer.

Pricing in the maximum tender offer will be set at 11 a.m. ET on June 21 by reference to the 1.375% Treasury due May 31, 2021 plus a fixed spread as follows:

• 65 bps for the $1 billion of 3.5% notes due 2020 issued by Rio Tinto Finance (USA) Ltd., which have an acceptance priority level of 1;

• 92 bps for the $1 billion of 4.125% notes due 2021 issued by Rio Tinto Finance (USA) Ltd., which have an acceptance priority level of 2;

• 98 bps for the $1.15 billion of 3.75% notes due 2021 issued by Rio Tinto Finance (USA) Ltd., which have an acceptance priority level of 2;

• 140 bps for the $1 billion of 3.5% notes due 2022 issued by Rio Tinto Finance (USA) plc, which have an acceptance priority level of 3; and

• 140 bps for the $1 billion of 2.875% notes due 2022 issued by Rio Tinto Finance (USA) plc, which have an acceptance priority of 3.

In each case, the total purchase price will include an early tender premium of $30 for each $1,000 principal amount tendered by 5 p.m. ET on June 20, the early tender date. Holders who tender their notes after the early deadline will receive the total amount less the early premium.

The companies will also pay accrued interest.

The maximum tender offer will remain open until 11:59 p.m. ET on July 5.

Settlement could be as early as June 22 for early tendered notes, with remaining tenders settled on July 6.

The lead dealer managers are Citigroup Global Markets Ltd. (800 558-3745, 212 723-6106, +44 0 20 7986 8969), HSBC Securities (USA) Inc. (888 HSBC-4LM, 212 525-5552 or +44 0 20 7992 6237), J.P. Morgan Securities LLC (866 834-4666, 212 834-3424 or +44 0 20 7134 2468) and MUFG (877 744-4532, 212 405-7481 or +44 0 20 7577 4048/4218). The co-dealer managers are Natixis Securities Americas LLC, RBS Securities Inc., Santander Investment Securities Inc. and Standard Chartered Bank.

The depositary and information agent is Global Bondholder Services Corp. (866 470-3800 or 212 430-3774 or gbsc-usa.com/RioTinto).

Rio Tinto is a mining group based in London.

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