Newmont Announces Pricing of Notes to Repay Outstanding Borrowings Under Revolving Credit Facility

Rhea-AI Summary

Newmont Corporation and Newcrest Finance Pty Limited have priced a private offering of $1 billion aggregate principal amount of 5.300% notes due 2026 and $1 billion aggregate principal amount of 5.350% notes due 2034. The Offering is expected to close on March 7, 2024, with the net proceeds intended for debt repayment and general corporate purposes.

Insights

Financial Analyst

The pricing of a $2 billion private offering by Newmont Corporation is a significant financial event that merits attention from multiple perspectives within the financial sector. The offering is split into two tranches, with different maturities, which is a common strategy to manage debt maturity profiles and interest rate exposure. The interest rates of 5.300% for the 2026 Notes and 5.350% for the 2034 Notes are indicative of the current market conditions and the company's creditworthiness.

From an investment standpoint, the use of proceeds to repay existing debt is a prudent move, potentially leading to a more favorable debt-to-equity ratio and possibly improving the company's credit rating. However, investors should be aware of the potential dilution of earnings per share if the debt is used for activities that do not generate immediate income. Additionally, the fact that these notes are not registered under the Securities Act and are being offered only to qualified institutional buyers and certain non-U.S. persons indicates a targeted approach to fundraising, which may limit liquidity for some investors.

Market Research Analyst

Within the context of the mining industry, Newmont Corporation's strategic financial maneuver to repay its revolving credit facility suggests a focus on strengthening its balance sheet. This move could be interpreted as a signal of financial stability and a conservative approach to leverage. Market analysts often scrutinize such actions to assess a company's long-term financial health and operational efficiency.

It is also worth noting that the repayment of the bilateral credit debt, which was acquired as part of the Newcrest Mining Limited acquisition, reflects on Newmont's post-acquisition integration strategy. The success of this strategy is crucial for investor confidence, as it can affect the company's future growth and profitability. The terms of the notes being offered may also reflect the industry's current cost of capital, which could be a benchmark for other companies in the sector considering similar financial activities.

Legal Expert

The legal implications of the offering are also noteworthy. The fact that the notes will not be registered under the Securities Act and are subject to specific selling restrictions, such as Rule 144A and Regulation S, is indicative of a complex regulatory environment that companies must navigate when raising capital. Compliance with these regulations ensures that the offering is conducted lawfully and targets appropriate investors.

Additionally, the cautionary statement regarding the offer's legality in certain jurisdictions and the lack of regulatory approval for the offering document highlights the importance of due diligence for potential investors. These legal constraints underscore the need for transparency and adherence to securities laws, which are designed to protect investors and maintain the integrity of the financial markets.

DENVER--(BUSINESS WIRE)-- Newmont Corporation (NYSE: NEM, TSX: NGT, ASX: NEM, PNGX: NEM) (“Newmont” or the “Company”) and Newcrest Finance Pty Limited, a wholly owned subsidiary of Newmont (“Newcrest Finance” and, together with Newmont, the “Issuers”) announced today that they have priced a private offering (the “Offering”) of $1 billion aggregate principal amount of 5.300% notes due 2026 (the “2026 Notes”) and $1 billion aggregate principal amount of 5.350% notes due 2034 (the “2034 Notes” and, together with the 2026 Notes, the “Notes”). The Notes will be guaranteed on an unsecured senior basis by Newmont USA Limited, a wholly owned subsidiary of Newmont. Subject to customary closing conditions, the Offering is expected to close on March 7, 2024.

The Issuers intend to use a portion of the net proceeds from the Offering to repay all outstanding borrowings under the Company’s revolving credit facility, with the remaining proceeds for general corporate purposes. The Company previously used borrowings under its revolving credit facility, along with cash on hand, to repay approximately US$1.9 billion aggregate principal amount of bilateral credit debt acquired by Newmont as part of its acquisition of Newcrest Mining Limited.

This news release does not constitute an offer to sell or a solicitation of an offer to buy, nor shall there be any sale of any of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. The securities being offered have not been approved or disapproved by any regulatory authority, nor has any such authority passed upon the accuracy or adequacy of any offering document.

The Notes will not be registered under the Securities Act or the securities laws of any state or other jurisdiction and may not be offered or sold in the United States absent registration or an applicable exemption from such registration requirements. The Notes will be offered only to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"), and to certain non-U.S. persons in accordance with Regulation S under the Securities Act.

Cautionary Statement Regarding Forward-Looking Statements

This news release contains “forward-looking statements,” which are intended to be covered by the safe harbor created by such sections and other applicable laws. Where a forward-looking statement expresses or implies an expectation or belief as to future events or results, such expectation or belief is expressed in good faith and believed to have a reasonable basis. However, such statements are subject to risks, uncertainties and other factors, which could cause actual results to differ materially from future results expressed, projected or implied by the forward-looking statements. Forward-looking statements often address our expected future business and financial performance and financial condition; and often contain words such as “anticipate,” “intend,” “plan,” “will,” “would,” “estimate,” “expect,” “believe,” “pending” or “potential.” Forward-looking statements in this news release may include, without limitation, statements relating to future offers and sales of securities and the terms thereof, including any guarantee thereof, and the use of proceeds of such sales. Estimates or expectations of future events or results are based upon certain assumptions, which may prove to be incorrect. Such assumptions, include, but are not limited to political developments in any jurisdiction in which Newmont operates being consistent with its current expectations, market conditions, the satisfaction or timely satisfaction of customary closing conditions to such sales, and other planning assumptions. For a more detailed discussion of such risks, see Newmont’s Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on February 29, 2024, as well as Newmont’s other SEC filings, under the heading “Risk Factors”, and other factors identified in Newmont’s reports filed with the SEC, available on the SEC website or www.newmont.com. Newmont does not undertake any obligation to release publicly revisions to any “forward-looking statement,” including, without limitation, outlook, to reflect events or circumstances after the date of this news release, or to reflect the occurrence of unanticipated events, except as may be required under applicable securities laws. Investors should not assume that any lack of update to a previously issued “forward-looking statement” constitutes a reaffirmation of that statement. Continued reliance on “forward-looking statements” is at investors’ own risk.

About Newmont

Newmont is the world’s leading gold company and a producer of copper, zinc, lead, and silver. The Company’s world-class portfolio of assets, prospects and talent is anchored in favorable mining jurisdictions in Africa, Australia, Latin America & Caribbean, North America, and Papua New Guinea. Newmont is the only gold producer listed in the S&P 500 Index and is widely recognized for its principled environmental, social, and governance practices. Newmont is an industry leader in value creation, supported by robust safety standards, superior execution, and technical expertise. Founded in 1921, the Company and has been publicly traded since 1925.

At Newmont, our purpose is to create value and improve lives through sustainable and responsible mining.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240304357076/en/

Media Contact

Jennifer Pakradooni

globalcommunications@newmont.com

Investor Contact

Neil Backhouse

investor.relations@newmont.com

Source: Newmont Corporation

FAQ

What is the total value of the notes offered in the private offering by Newmont Corporation and Newcrest Finance Pty Limited?

The total value of the notes offered is $2 billion, with $1 billion each for the 2026 Notes and the 2034 Notes.

When is the expected closing date for the private offering?

The Offering is expected to close on March 7, 2024.

How will the net proceeds from the Offering be utilized by the Issuers?

A portion of the net proceeds will be used to repay all outstanding borrowings under the Company’s revolving credit facility, with the remaining proceeds allocated for general corporate purposes.

What is the purpose of the private offering by Newmont Corporation and Newcrest Finance Pty Limited?

The purpose of the private offering is to raise funds through the issuance of notes to repay debt and support general corporate activities.