Nexa Resources Intends To Offer Senior Unsecured Notes
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Insights
Debt Refinancing Strategy: The announcement by Nexa Resources regarding its intention to issue new senior unsecured notes is a strategic move aimed at optimizing its capital structure. By refinancing existing debt, specifically the notes due in 2027 and 2028, Nexa is likely attempting to take advantage of current market conditions to reduce interest expenses and extend maturities. This could potentially improve the company's debt profile and liquidity position. Investors are typically interested in such maneuvers as they can indicate a proactive approach to financial management and possibly lead to improved credit ratings.
Market Dynamics: The decision to target qualified institutional buyers and non-U.S. persons suggests that Nexa is looking to diversify its investor base and tap into international markets. This could indicate confidence in the company's growth prospects and the appeal of its credit story to a broader audience. However, the exclusion of retail investors might be due to the higher complexity and risk associated with unsecured debt, which generally requires a more sophisticated investor base.
Securities Law Compliance: Nexa's adherence to Rule 144A and Regulation S under the Securities Act is noteworthy. These rules govern the sale of securities to certain institutional investors and non-U.S. persons, respectively and are designed to protect investors by ensuring that only those with the expertise and financial strength to understand and bear the risks are participating. The company's compliance with these regulations is important to avoid legal pitfalls and ensure a smooth issuance process. It's important for investors to recognize that such regulatory compliance also underscores the company's commitment to transparency and legal integrity.
Industry Context: The mining sector, in which Nexa operates, is capital-intensive and often subject to cyclical fluctuations. Companies within this industry frequently resort to the debt markets to finance their operations and growth initiatives. Nexa's move to refinance its debt could be a response to industry trends or specific operational needs. For investors, it's essential to consider the underlying commodity prices and market demand that could affect Nexa's financial performance and its ability to meet debt obligations. A thorough analysis of the sector's health and Nexa's competitive position would provide a clearer picture of the potential risks and rewards associated with this debt offering.
LUXEMBOURG / ACCESSWIRE / April 1, 2024 / Nexa Resources S.A. ("Nexa Resources", "Nexa" or the "Company") (NYSE:NEXA) announced today its plan to offer new senior unsecured notes guaranteed by Nexa Resources Cajamarquilla S.A. and Nexa Recursos Minerais S.A. (collectively, the "Guarantors"). Nexa aims to use the net proceeds from the offering primarily to fund a cash tender offer for its existing notes due 2027 and notes due 2028 that are validly tendered and accepted for purchase pursuant to tender offers announced today, and the remainder, if any, for general corporate purposes, including liability management transactions.
The notes will be unsecured obligations of Nexa and will be fully and unconditionally guaranteed by the Guarantors. The guarantees will rank equally in right of payment with all of the Guarantors' other unsecured and unsubordinated debt obligations.
The Notes have not been and will not be registered under the Securities Act or state securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and applicable state securities laws. The Notes will be offered and sold only to persons that are either (1) qualified institutional buyers in accordance with Rule 144A under the Securities Act, or (2) non-U.S. persons in accordance with Regulation S under the Securities Act.
This press release shall not constitute an offer to sell or a solicitation of an offer to buy the securities described herein, nor shall there be any sale of these securities in any state or other jurisdiction in which such an offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
About Nexa
Nexa is a large-scale, low-cost integrated zinc producer with over 65 years of experience developing and operating mining and smelting assets in Latin America. Nexa currently owns and operates five long-life mines, three of which are located in the central Andes region of Peru, and two of which are located in the state of Minas Gerais in Brazil. Nexa is ramping up Aripuanã, its sixth mine, in the state of Mato Grosso in Brazil. Nexa also currently owns and operates three smelters, two of which are located in the state of Minas Gerais in Brazil, and one of which is located in Cajamarquilla, Peru, which is the largest smelter in the Americas.
Nexa was among the top five producers of mined zinc globally in 2023 and one of the top five metallic zinc producers worldwide in 2023, according to Wood Mackenzie.
Cautionary Statement on Forward-Looking Statements
This news release contains certain forward-looking information and forward-looking statements as defined in applicable securities laws (collectively referred to in this news release as "forward-looking statements"). Forward-looking statements contained in this news release may include, but are not limited to, zinc and other metal prices and exchange rate assumptions, projected operating and capital costs, metal or mineral recoveries, head grades, mine life, production rates, and returns; the Company's potential plans; the estimation of the tonnage, grade and content of deposits and the extent of mineral resource and mineral reserve estimates; timing of commencement of production; exploration potential and results; and the timing and receipt of necessary permits for future operations.
These statements are based on information currently available to the Company and the Company provides no assurance that actual results and future performance and achievements will meet or not differ from the expectations of management or qualified persons. All statements other than statements of historical fact are forward-looking statements. The words "believe," "will," "may," "may have," "would," "estimate," "continues," "anticipates," "intends," "plans," "expects," "budget," "scheduled," "forecasts" and similar words are intended to identify estimates and forward-looking statements. Forward-looking statements are not guarantees and involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Actual results and developments may be substantially different from the expectations described in the forward-looking statements for a number of reasons, many of which are not under our control, among them, the activities of our competition, the future global economic situation, weather conditions, market prices and conditions, exchange rates, and operational and financial risks. The unexpected occurrence of one or more of the abovementioned events may significantly change the results of our operations on which we have based our estimates and forward-looking statements. Our estimates and forward-looking statements may also be influenced by, among others, legal, political, environmental, or other risks that could materially affect the potential development of the Project, including risks related to outbreaks of contagious diseases or health crises impacting overall economic activity regionally or globally, as well as risks relating to ongoing or future investigations by local authorities with respect to our business and operations and the conduct of our customers, including the impact to our financial statements regarding the resolution of any such matters.
These forward-looking statements related to future events or future performance and include current estimates, predictions, forecasts, beliefs and statements as to management's expectations with respect to, but not limited to, the business and operations of the Company and mining production, our growth strategy, the impact of applicable laws and regulations, future zinc and other metal prices, smelting sales, capex, expenses related to exploration and project evaluation, estimation of Mineral Reserves and/or Mineral Resources, mine life and our financial liquidity.
Forward-looking statements are necessarily based upon a number of factors and assumptions that, while considered reasonable and appropriate by management and qualified persons considering their experience are inherently subject to significant uncertainties and contingencies and may prove to be incorrect. Statements concerning future production costs or volumes are based on numerous assumptions of management regarding operating matters and on assumptions that demand for products develops as anticipated, that customers and other counterparties perform their contractual obligations, full integration of mining and smelting operations, that operating and capital plans will not be disrupted by issues such as mechanical failure, unavailability of parts and supplies, labor disturbances, interruption in transportation or utilities, adverse weather conditions, and that there are no material unanticipated variations in metal prices, exchange rates, or the cost of energy, supplies or transportation, among other assumptions.
Estimates and forward-looking statements refer only to the date when they were made, and we do not undertake any obligation to update or revise any estimate or forward-looking statement due to new information, future events or otherwise, except as required by law. Estimates and forward-looking statements involve risks and uncertainties and do not guarantee future performance, as actual results or developments may be substantially different from the expectations described in the forward-looking statements. Further information concerning risks and uncertainties associated with these forward-looking statements and our business can be found in our public disclosures filed under our profile on SEDAR (www.sedarplus.ca) and on EDGAR (www.sec.gov).
For further information, please contact:
Investor Relations Team
ir@nexaresouces.com
SOURCE: Nexa Resources S.A.
View the original press release on accesswire.com
FAQ
What is Nexa Resources S.A. planning to offer?
How will Nexa use the net proceeds from the offering?
What type of obligations will the notes be?
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Is this press release an offer to sell securities?
