Fortescue has secured a Renminbi-denominated (RMB) $14.2 billion ($3 billion) syndicated term loan, marking the first RMB facility of its kind by an Australian company.
The deal, backed by leading Chinese, Australian and international lenders, is a significant step in Fortescue’s capital strategy and highlights its strong, long-standing ties with China.
Proceeds from the five-year unsecured facility will support general corporate purposes and Fortescue’s decarbonisation goals, including partnerships with Chinese suppliers and technology leaders.
Fortescue executive chair Andrew Forrest said the loan represents more than just financial backing.
“It’s a signal of what is possible when partners are aligned in ambition,” Forrest said. “As the United States steps back from investing in what will be the world’s greatest industry, China and Fortescue are advancing the green technology needed to lead the global green industrial revolution.
“China continues to lead the world in industrial scale and innovation. Fortescue shares that ambition and drive. This landmark RMB financing strengthens our long-standing partnerships with Chinese institutions and opens new frontiers for collaboration.”
Fortescue group chief financial officer Apple Paget said this financing deepens its engagement with existing financial partners and further expands the company’s banking syndicate to institutions with Renminbi lending capabilities.
“The exceptional demand through the syndication process is recognition of Fortescue’s strong credit profile, track record for operating excellence and disciplined capital allocation,” Paget said.
“It marks another milestone in execution of our capital management strategy, diversifying funding sources, enhancing flexibility and lowering our cost of capital, including achieving Fortescue’s lowest ever cost of debt. It reinforces our position as responsible custodians of capital.”
The facility was arranged by Bank of China and Industrial and Commercial Bank of China (Sydney branches), with a 12-month availability period and repayments starting 18 months after close.