Freeport-McMoRan Inc (NYSE:FCX) announced that it has commenced offers to eligible holders to exchange any and all of the outstanding senior notes issued by Freeport-McMoRan Oil & Gas LLC (FM O&G), FCX Oil & Gas LLC and FMSTP Inc., as co-issuers, and guaranteed by FCX for (1) new senior notes to be issued by FCX and guaranteed by FM O&G and (2) cash.
The exchange offers and consent solicitations will expire at 11:59 p.m., New York City (NYC) time, on December 27, 2016, unless extended. To be eligible to receive the applicable total exchange consideration, which includes the early tender premium of $30 principal amount of new notes, eligible holders of existing notes must validly tender their existing notes at or prior to 5:00 p.m., NYC time, on December 12, 2016, unless extended.
The following table sets forth the exchange consideration for each $1,000 principal amount of existing notes for which the new senior notes and cash are being offered:
* The optional redemption prices have been increased by 0.25% in each case, other than in the case of optional redemption at 100.00%.
Each series of newly issued FCX senior notes will have an interest rate and maturity date that is identical to the interest rate and maturity date of the applicable series of existing notes. The new notes will be senior unsecured obligations of FCX and will rank equally in right of payment with all other existing and future senior unsecured indebtedness of FCX.
Concurrently with the exchange offers, FCX is also soliciting consents from eligible holders of the existing notes to amend the indentures governing the existing notes to eliminate certain of the covenants, restrictive provisions and events of default and conform certain covenants to those in the outstanding notes of FCX pursuant to the terms and subject to the conditions set forth in the offering materials. The consent of the holders of a majority in aggregate principal amount of each applicable series of existing notes outstanding, acting together as one class for that series, will be required in order to adopt the proposed amendments to the existing indenture for that series.
Existing notes that are not validly tendered or that are validly tendered but validly withdrawn will remain outstanding and will continue to be subject to their existing terms despite the completion of the exchange offers and the related consent solicitations. However, if any exchange offer and related consent solicitation is consummated and the proposed amendments to the applicable existing indenture are effected, such amendments will also apply to all related existing notes not exchanged in such exchange offer and related consent solicitation and those existing notes will no longer have the benefit of the protection of the covenants, restrictive provisions and events of default eliminated by the applicable proposed amendments and will be subject to the covenants as modified by the proposed amendments.
Tenders of existing notes may not be withdrawn after 5:00 p.m., NYC time, on December 12, 2016, unless extended, except in certain limited circumstances as set forth in the offer materials. Eligible holders of existing notes may not deliver a consent in the applicable consent solicitation without tendering existing notes in the applicable exchange offer. If an eligible holder of existing notes tenders existing notes in any exchange offer, that holder will be deemed to deliver its consent, with respect to the principal amount of such tendered existing notes, to the applicable proposed amendments.
The exchange offers and related consent solicitations are being made pursuant to the terms and subject to the conditions set forth in an offering memorandum and consent solicitation statement and a related letter of transmittal, each dated November 29, 2016. (Original Source)
Shares of Freeport-McMoRan are up nearly 3% to $15.40 in pre-market traing. FCX has a 1-year high of $16.42 and a 1-year low of $3.52. The stock’s 50-day moving average is $9.78 and its 200-day moving average is $11.19.
On the ratings front, FCX stock has been the subject of a number of recent research reports. In a report issued on November 21, Cowen analyst Anthony Rizzuto reiterated a Buy rating on FCX, with a price target of $20, which implies an upside of 34% from current levels. Separately, on November 17, Deutsche Bank’s Chris Terry downgraded the stock to Hold and has a price target of $13.80.
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Anthony Rizzuto and Chris Terry have a yearly average return of 7.8% and 22.9% respectively. Rizzuto has a success rate of 63% and is ranked #751 out of 4241 analysts, while Terry has a success rate of 100% and is ranked #2342.
Overall, 2 research analysts have rated the stock with a Sell rating, 5 research analysts have assigned a Hold rating and 2 research analysts have given a Buy rating to the stock. When considering if perhaps the stock is under or overvalued, the average price target is $20.00 which is 33.6% above where the stock closed yesterday.
Freeport-McMoRan, Inc. engages as copper, gold and molybdenum mining company. It operates through the following segments: North America Copper Mines, South America Copper Mines, Africa Mining, Indonesia Mining, and Molybdenum Mining. The North America Copper Mines segment operates seven open-pit copper mines in North America- Morenci, Bagdad, Safford, Sierrita and Miami in Arizona, and Chino and Tyrone in New Mexico. The South America Copper Mines segment has two copper mines-Cerro Verde in Peru and El Abra in Chile. The Africa Mining segment operates in the Tenke Fungurume minerals district in the Katanga province of the Democratic Republic of Congo which produces copper and cobalt hydroxide. The Indonesia Mining segment includes copper and gold deposits at the Grasberg minerals district in Papua. The Molybdenum Mining segment operates at the Henderson and Climax primary molybdenum mines in Colorado.