Inco deals debentures

Taking advantage of low interest rates, Inco (N-T) intends to offer US$300 million worth of debentures in order to retire existing notes.

Net proceeds, expected to top $297 million, are earmarked for the early redemption of the 2016 and 2022 series of debentures. The former are convertible to equity and bear a coupon of 7.75%, whereas the latter simply bear interest at 9.6% annually. The new debentures would mature in 2015, though the rate of interest they will carry has not yet been announced.

The financing, which has yet to be approved by regulators, will be carried out in the U.S. and managed by Citigroup. JP Morgan and several other firms are included as underwriters.

Inco is the world’s largest nickel producer, next to Norilsk of Russia, and accounts for about a fifth of global sales.