Noranda sells 12-year notes

Mining conglomerate Noranda (NRD-T) intends to sell US$350 million worth of unsecured debentures in order to repay existing notes.

Net proceeds are mainly earmarked for US$300 million worth of existing debentures that mature in June. Those notes have been bearing interest at 8.125% annually, notably higher than the 6% coupon rate attached to the new ones.

The notes will be redeemable any time prior to maturity, which is scheduled for mid-October 2015. An early redemption requires the repayment of principal plus a make-whole premium.

The debt-financing all but ensures that Noranda surpasses its goal of raising $1 billion in new capital. The company embarked on the program to ensure sufficient liquidity to deal with its heavy debt. At mid-year, the company owed $4.5 billion, including $567 million, then due in one year’s time.

Working capital stood at $1.1 billion.

Citigroup and Barclay’s Capital are co-leading the debt financing.