Orica raises $725M

ORICA has completed a bond issue in the US to raise A$725 million.
Orica raises $725M Orica raises $725M Orica raises $725M Orica raises $725M Orica raises $725M

Staff reporter

The company issued US$451 million and A$70 million of fixed rate senior secured notes.

Initially launched as a US$250 million issue to refinance bonds maturing in October 2020, the transaction achieved a final order book of $1.3 billion, representing an oversubscription of more than five times.

The strong investor demand resulted in a tightening of margins and allowed the transaction to be upsized.

"The success of this issue reflects the resilience of the business and the market's overwhelming confidence in our capital structure and strategy for growth," Orica CEO Alberto Calderon said.

"Together with our oversubscribed equity capital raising used to fund the Exsa acquisition earlier in the year, this successful placement reflects strong continued support of both our shareholders and debt investors."

Orica raised A$600 million in February to acquire Peru's leading manufacturer and distributor of industrial explosives, Exsa.

Orica chief financial officer Christopher Davis said the latest transaction marked the company's seventh issuance in the US private placement market.

"This issue extends our maturity profile, with the average maturity of our debt book increasing to 5.9 years from 3.7 years, with no further financing requirements in the near-term," he said.

"The additional capital we have been able to raise will further strengthen our balance sheet, which is more important than ever in the current climate."

JP Morgan Securities and Citigroup Global Markets acted as joint placement agents, while ANZ Securities acted as co-agent.

Orica shares closed at $16.31 yesterday, valuing the company at $6.6 billion.