S&P gives Freeport-McMoRan notes BB

S&P Global Ratings said it assigned its BB issue-level rating and 3 recovery rating to Freeport-McMoRan Inc.’s new $800 million of senior unsecured notes due 2028 and 2030. The 3 recovery rating indicates S&P’s expectation for meaningful (50%-70%; rounded estimate: 60%) recovery in the event of a payment default.

The company will use the proceeds to fund tenders for portions of its 3.55% senior notes due 2022 ($806 million principal outstanding), 3 7/8% notes due 2023 ($1.9 billion principal outstanding), and 4.55% notes due 2024 ($850 million principal outstanding).

“We expect Freeport’s adjusted leverage to be in the 3x–3.5x range in 2020 based on our higher copper and gold price assumptions and the steady progress it has made on improving the production levels at its Grasberg underground mine,” the agency said in a press release.

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