Fortescue’s $500 Million Senior Notes Offering

Simpson Thacher represented J.P. Morgan Securities LLC as the initial purchaser in connection with a 144A/Regulation S offering of US$500 million aggregate principal amount of 5.125% Senior Notes due 2023 by FMG Resources (August 2006) Pty Ltd, an Australian corporation (“FMG”) and a direct wholly owned subsidiary of Fortescue Metals Group Ltd., an Australian corporation (“Fortescue”). The notes are guaranteed by Fortescue.

The deal closed on March 15, 2018.

FMG intends to use the net proceeds from the offering to redeem a portion of its remaining outstanding 9.75% Senior Secured Notes due 2022 (the “2022 Senior Secured Notes”).

Simpson Thacher is also representing J.P. Morgan Securities LLC as the dealer manager in connection with FMG’s offer to purchase for cash up to US$1.4 billion in aggregate principal amount of the 2022 Senior Secured Notes. FMG received tenders of and accepted for purchase US$446.9 million in an early settlement on March 8, 2018. The tender offer will expire on March 21, 2018.

Fortescue is engaged in the production and export of iron ore in the Pilbara region of Western Australia. Fortescue is the third largest iron ore producer in Australia and the world’s fourth-largest exporter into the seaborne iron ore market. Fortescue is listed on the Australian Securities Exchange. The company, led by Elizabeth Anne Gaines, Julie Shuttleworth and Ian Wells, in 2017 recorded $8.57 Billion Revenues.

The Simpson Thacher team included David Azarkh (Picture), Teresa Chen and William Hong (Capital Markets); Robert Holo and Brian Mendick (Tax); Timothy Mulvihill and Noreen Lavan (Environmental); Joo Hyun Lee (Executive Compensation and Employee Benefits); and Jennie Getsin (Blue Sky).

Involved fees earner: David Azarkh – Simpson Thacher & Bartlett; Teresa Chen – Simpson Thacher & Bartlett; William Beom Hong – Simpson Thacher & Bartlett; Robert Holo – Simpson Thacher & Bartlett; Brian Mendick – Simpson Thacher & Bartlett; Timothy Mulvihill – Simpson Thacher & Bartlett; Noreen Lavan – Simpson Thacher & Bartlett; Joo Hyun Lee – Simpson Thacher & Bartlett; Jennie Getsin – Simpson Thacher & Bartlett;

Law Firms: Simpson Thacher & Bartlett;

Clients: JP Morgan Securities;

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Author: Ambrogio Visconti