Hudbay management is happy with ‘successful’ refinancing of 7¼% notes

By Devika Patel

Knoxville, Tenn., Nov. 4 – Hudbay Minerals Inc.’s management was pleased with the “successful” refinancing the company completed last quarter in which the company issued $600 million of 6 1/8% notes due 2029 and used the proceeds to pay off its 7¼% notes due 2023.

“We exited the quarter with approximately $450 million in cash and equivalents and further demonstrated our prudent steps to manage our balance sheet through a successful bond refinancing during the quarter,” president and chief executive officer Peter Kukielski said on the company’s third quarter ended Sept. 30 earnings conference call on Tuesday.

“In late September, we completed the offering of $600 million of [6 1/8%] senior notes due April 2029.

“The proceeds from this offering were used to redeem all of our outstanding [7¼%] notes due in 2023,” he said.

Adjusted EBITDA for the third quarter was $96.1 million.

Cash and cash equivalents increased during the third quarter to $449 million as of Sept. 30.

On Sept. 9, the company priced an upsized $600 million issue of 8.5-year senior notes (B3/B/B+) at par to yield 6 1/8% in a drive-by.

The issue size was increased from $500 million.

The yield printed at the tight end of the 6 1/8% to 6 3/8% yield talk. Initial guidance was in the mid-6% area.

Joint bookrunner Barclays billed and delivered.

The Toronto-based metals mining company earmarked the proceeds to refinance its existing senior notes due 2023, with any remaining proceeds to be used for general corporate purposes including additional debt repayment.

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