South African-based Gold Fields Ltd. sold its first U.S. dollar denominated bond offering Friday morning. The $1-billion (U.S.) deal will pay a 4.875 per cent coupon and mature in 2020.
In mid-September Gold Fields' management signalled that they were talking to fixed-income investors about a potential deal to determine the appetite for new debt. All of this talk came up around the time of the Denver Gold Forum, which is always a big event in the gold world.
The offering also comes on the back of Moody's assigning Gold Fields an investment grade rating (Baa2) in mid-September. The company has a similar BBB-rating from Standard & Poor's.
The deal surprises few people. Gold analyst Tanya Jakusconek at National Bank Financial noted she was not caught off guard by the deal this morning because the money will be used to pay off debt, which totalled $1.1-billion as of June 30. The proceeds are also expected to partially fund Gold Field's growth agenda, which management hopes will increase production to 5 million ounces a year.
The new debt offering was sold through Gold Fields Orogen Holding (BVI) Ltd., a subsidiary of the parent company.