September 08, 2008
Rio raises USD 40 billion loan for Alcan acquisition
Rio Tinto announced that it has successfully completed the sub underwriting phase of the syndication of its USD 40 billion term loan and revolving credit facilities. As per Rio release this is the largest ever loan facility raised by a UK corporate and the fourth largest worldwide.
Structure of the USD 40 billion facilities
| Facility A | 15 | Term Loan | 364-days (1 year extension) |
| Facility B | 10 | Revolving Credit Facility | 3 years |
| Facility C | 5 | Revolving Credit Facility | 5 years |
| Facility D | 10 | Term Loan | 5 years + 1 day |
The syndication received very strong support despite recent volatility in the global credit markets and was more than one third oversubscribed. The Facilities were initially underwritten by The Royal Bank of Scotland, Deutsche Bank, Credit Suisse and Société Générale.
The Facilities will be used to finance the acquisition of all the outstanding common shares of Alcan Inc for a total consideration of USD 101 per common share representing a total equity consideration of approximately USD 38.1 billion and an enterprise value of approximately USD 44.0 billion.
Mr Guy Elliott CFO of Rio Tinto said "This extremely positive response underlines the strength of Rio Tinto's existing asset base, the attractiveness of the Alcan transaction and the solid credit profile of the enlarged Rio Tinto Group. This bodes well for our future refinancing plans in the debt capital markets."
