CORPORATE DEBT – AUSTRALIA

Fortescue on track to hit gearing target

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Original article by Paul Garvey
The Australian – Page: 21 : 24-Jun-16

Fortescue Metals Group’s early repayment of debt over the course of 2015-16 will reduce its interest costs by about $US186m a year. The iron ore miner advised on 23 June 2016 that it has repaid an additional $US500m ($A663.4m) worth of debt. It has now repaid a total of $US2.9bn so far in 2015-16, and CFO Steve Pearce says the group could soon have lower gearing than BHP Billiton and Rio Tinto. Fortescue shares closed 8.3 per cent higher at $A3.53.

CORPORATES
FORTESCUE METALS GROUP LIMITED – ASX FMG, BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, METALYTICS PTY LTD, CREDIT SUISSE (AUSTRALIA) LIMITED

Fortescue stays disciplined on debt

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Original article by Paul Garvey
The Australian – Page: 20 : 28-Apr-16

Fortescue Metals Group will reduce the annual interest bill on its debt by $US48m by redeeming some $US577m ($A757.8m) of senior unsecured notes. These notes were due to be redeemed in 2019, but the iron ore group intends to do so on 1 June 2016. CEO Nev Powers says repaying debt will continue to be a priority for Fortescue, which has repaid or redeemed some $US1.7bn worth of debt in the last year.

CORPORATES
FORTESCUE METALS GROUP LIMITED – ASX FMG

South32 cuts its debts further

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Original article by Paul Garvey
The Australian – Page: 18 : 22-Jan-16

South32’s net debt fell to $US115m in the December 2015 quarter, after it repaid $US81 million worth of debt during the period. The BHP Billiton spin-off’s debt had exceeded $US400m at the start of 2015-16, and Paul McTaggart of Credit Suisse forecasts that it will have no debt at the end of the financial year. Meanwhile, South32 has reported that its metallurgical coal output fell by 41 per cent during the second quarter, while manganese production was 37 per cent lower.

CORPORATES
SOUTH32 LIMITED – ASX S32, BHP BILLITON LIMITED – ASX BHP, CREDIT SUISSE (AUSTRALIA) LIMITED

Small miners close to default: RBA

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Original article by Geoff Winestock, Angela Macdonald-Smith
The Australian Financial Review – Page: 3 : 19-Oct-15

The Reserve Bank of Australia’s latest Financial Stability Review warns that many smaller resources groups are close to defaulting on debt repayments. The central bank says the number of such companies that are at risk of default has reached its highest level since the global financial crisis. Few junior miners have collapsed in 2015, although the outlook for some is uncertain, and several mining services firms have been placed in administration.

CORPORATES
RESERVE BANK OF AUSTRALIA, MIRABELA NICKEL LIMITED – ASX MBN, ATLAS IRON LIMITED – ASX AGO, EMECO HOLDINGS LIMITED – ASX EHL, TERMITE RESOURCES NL, WESTERN DESERT RESOURCES LIMITED, PLUTON RESOURCES LIMITED – ASX PLV, BANDANNA ENERGY LIMITED – ASX BND, WDS LIMITED – ASX WDS, BIG RIM PTY LTD, SARGENT, HEAVY HAULAGE AUSTRALIA PTY LTD, BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO

Cheap debt to buoy Rio, BHP dividends, but for limited time only

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Original article by Amanda Saunders
The Australian Financial Review – Page: 13 : 20-Jul-15

BHP Billiton’s progressive dividend policy is expected to cost it about $US6.5bn ($A8.7bn) in fiscal 2015, while Rio Tinto faces a $US4.1bn impost by maintaining the policy. Ben Davis of Liberum Capital argues that the resources giants should finance their progressive dividend policies via debt, saying the low cost of accessing debt markets will make this a viable strategy for several years. He notes that some investors would sell out of BHP and Rio if they adopted a dividend payout ratio.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, LIBERUM CAPITAL LIMITED, GLENCORE PLC, ABERDEEN ASSET MANAGEMENT LIMITED, CITIGROUP PTY LTD, ANGLO AMERICAN PLC

Pressure is on for Snowy Hydro

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Original article by Angela Macdonald-Smith
The Australian Financial Review – Page: 17 : 11-Feb-15

Snowy Hydro CEO Paul Broad has downplayed speculation that privatisation may again be on the agenda for the government-owned power company. Meanwhile, he says the group needs to deliver on its growth forecasts and projected synergies in order to justify its acquisition of Lumo Energy and the Colongra gas-fired power station in 2014. Snowy Hydro boasts around $A1.2bn worth of debt following the acquisitions

CORPORATES
SNOWY HYDRO LIMITED, LUMO ENERGY AUSTRALIA PTY LTD, RED ENERGY PTY LTD, INFRATIL LIMITED – ASX IFZ, AGL ENERGY LIMITED – ASX AGL, ORIGIN ENERGY LIMITED – ASX ORG, ENERGYAUSTRALIA PTY LTD, ONE.TEL LIMITED, INFRASTRUCTURE NEW SOUTH WALES

Qantas frequent flyer float plan back on ice

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Original article by Michael Smith,Jamie Freed
The Australian Financial Review – Page: 1 & 10 : 21-Aug-14

The frequent flyer program of Qantas boasted underlying EBITA of $A146m for the first half of 2013-14, and now more than 10 million members. The carrier is believed to be poised to abandon plans to sell 30-40 per cent of the Qantas Loyalty business via an IPO, and a number of analysts had concerns about such a strategy. Qantas will release its full-year results on 28 August 2014, and is tipped to post a pre-tax underlying loss of $A750m

CORPORATES
QANTAS AIRWAYS LIMITED – ASX QAN,QANTAS FREQUENT FLYER LIMITED,SHAW STOCKBROKING LIMITED,BT INVESTMENT MANAGEMENT LIMITED – ASX BTT,COLONIAL FIRST STATE GROUP LIMITED,BALANCED EQUITY MANAGEMENT PTY LTD,WOOLWORTHS LIMITED – ASX WOW,MACQUARIE GROUP LIMITED – ASX MQG,CITIGROUP PTY LTD

Lynas shares slide as fears mount over debt burden

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Original article by Sarah-Jane Tasker
The Australian – Page: 18 : 1-Aug-14

The stock of Australian-listed rare earths group Lynas Corporation closed 17% lower at $A0.17 on 31 July 2014. The market reacted to concerns that the company may struggle to make a repayment of $US35m ($A37.5m) on its debt by the 30 September deadline, as well as to data in its output report for the June quarter. While Lynas unveiled an increase of 117% year-on-year to 1,882 tonnes in shipments from its Malaysian plant, the price achieved fell by over $US4 to $US18.25 a kilogram

CORPORATES
LYNAS CORPORATION LIMITED – ASX LYC, SOJITZ CORPORATION, JAPAN OIL GAS AND METALS NATIONAL CORPORATION, DEUTSCHE BANK AG

Southern Cross in trouble as new CFO quits

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Original article by Darren Davidson
The Australian – Page: 19 : 17-Jul-14

Analysts are concerned Australian-listed Southern Cross Media (SXL) may soon breach its banking covenants. Peter Lewis, who was appointed CFO in mid-June, has resigned just one month later, and the company is believed to be considering a share issue. Its stock on 16 July closed $A0.01 higher at $A1.16, but has lost 31% so far in calendar 2014. There is speculation that if Communications Minister Malcolm Turnbull changes media competition laws, SXL will cut its affiliate ties with Ten Network and merge with the latter’s Nine Entertainment rival. SXL has been affected by declining audience ratings for its and radio and regional TV stations

CORPORATES
SOUTHERN CROSS MEDIA GROUP LIMITED – ASX SXL, TEN NETWORK HOLDINGS LIMITED – ASX TEN, NINE ENTERTAINMENT COMPANY HOLDINGS LIMITED – ASX NEC, SEVEN WEST MEDIA LIMITED – ASX SWM, 2DAY FM AUSTRALIA PTY LTD, AUSTEREO GROUP LIMITED, AUSTRALIAN BROADCASTING CORPORATION, SPECIAL BROADCASTING SERVICE (SBS), AUSTRALIA. DEPT OF COMMUNICATIONS, WIN CORPORATION PTY LTD, FAIRFAX MEDIA LIMITED – ASX FXJ, FACEBOOK AUSTRALIA PTY LTD, MACQUARIE WEALTH MANAGEMENT

BHP, Rio buyback plans put in doubt

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Original article by Matt Chambers
The Australian – Page: 17 : 7-Jul-14

Analysts at Macquarie and Credit Suisse have voiced doubts on whether planned stock repurchasing schemes of BHP Billiton and Rio Tinto will go ahead. Both Australian-listed groups have been affected by a recent drop in the iron ore price, which may cost investors the equivalent of $US11bn ($A11.7bn) in cash. The companies want to reduce their net liabilities before buying back shares, with BHP aiming for $US25bn by mid-2015 and Rio for $US13bn by late that year

CORPORATES
BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, MACQUARIE GROUP LIMITED – ASX MQG, CREDIT SUISSE (AUSTRALIA) LIMITED, UBS HOLDINGS PTY LTD, GLENCORE XSTRATA PLC, TRAFIGURA BEHEER BV, X2 RESOURCES PARTNERS LP, JINCHUAN NON-FERROUS METALS IMPORT AND EXPORT COMPANY, MMG LIMITED