Back to top

Analyst Blog

Rio Tinto Finance (USA) plc, a subsidiary of Rio Tinto plc (RIO - Analyst Report), announced the pricing of $3.0 billion fixed and floating rate bonds. Each of the bond categories comprises two tranches of notes. However, Rio Tinto has not revealed the purpose for which the proceeds shall be used.

The fixed rate bonds consists of 3-year fixed rate notes at 1.375% for $1.0 billion, maturing on Jun 17, 2016 as well as 5.5-year fixed rate notes at 2.250% for $1.25 billion, maturing on Dec 14, 2018.

The floating rate bonds consist of 2-year floating rate notes, paying a coupon of 3-month US$ LIBOR added with 55 basis points, which are due to mature on Jun 19, 2015. Apart from this, the floating rate bonds include 3-year floating rate bonds, paying a coupon of 3-month US$ LIBOR added with 84 basis points, maturing on Jun 17, 2016.

Although not directly issued by Rio Tinto, these bonds will be guaranteed by Rio Tinto plc and Rio Tinto Limited.

As on Dec 31, 2013, Rio Tinto had $7.1 billion in cash and cash equivalents and $24.6 billion of borrowings and other financial liabilities. Rio Tinto had $1.0 billion interest payments pending as on Dec 31, 2012, which will likely increase with the issue of these bonds.

Rio Tinto Finance (USA) plc made a similar kind of issue in Aug 2012. However, the issue was restricted to fixed rate bonds,with an average maturity of 12.9 years and an average coupon rate of 2.67%, valued at $3.0 billion. The total offer comprised 5-year debt securities at 1.625% for $1.25 billion, maturing on Aug 21, 2017, 10-year securities at 2.875% for $1.0 billion maturing on Aug 21, 2022 and 30-year securities at 4.125% for $750 million maturing on Aug 21, 2042.

Rio Tinto currently carries a Zacks Rank #4 (Sell). Not all stocks in the mining industry are performing as badly as Rio Tinto. Companies like Golden Minerals Co (AUMN - Snapshot Report), Hi-Crush Partners LP (HCLP - Snapshot Report) and Alliance Resource Partners LP (ARLP - Snapshot Report), each carrying a Zacks Rank #2 (Buy), appear impressive and are worth considering.

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
ERBA DIAGNO… ERB 3.55 +11.64%
CHINA BIOLO… CBPO 55.57 +7.40%
BITAUTO HOL… BITA 96.14 +5.58%
LUXOFT HOLD… LXFT 38.77 +3.64%
INSITE VISI… INSV 0.30 +3.41%