Newmont Corporation NEM announced plans to offer $1 billion in total principal amount of 2.250% senior notes due 2030. The company has also priced the notes offering.
Notably, the offering is slated to close on Mar 18, 2020, subject to customary closing conditions. Moreover, the offering is made in compliance with the shelf registration of Newmont, filed with the Securities and Exchange Commission.
The notes will be treated as senior unsecured obligations of Newmont and will rank at par with its current and future unsecured senior debt. Further, it will be senior to the future subordinated debt of the company. Notably, the notes were guaranteed by the company’s subsidiary Newmont USA Limited on a senior unsecured basis.
Newmont anticipates $985 million net proceeds from the senior notes offering, after deducting estimated discounts (before expenses).
The company plans to use the net proceeds from the senior notes offering along with cash from its balance sheet (as required) for the repurchase of its outstanding 3.500% senior notes slated to mature in 2022 and outstanding 3.700% senior notes slated to mature in 2023.
It also involves the repurchase of Goldcorp Inc’s (Newmont’s fully-owned subsidiary) outstanding 3.700% senior notes, slated to mature in 2023, for up to certain total maximum principal tender amounts set out in the relevant purchase offer accepted for purchase. Moreover, it involves the payment of all unpaid and accrued interest thereon as well as any remaining part for working capital and other general corporate purposes.
BMO Capital Markets Corp., Goldman Sachs & Co. LLC and J.P. Morgan Securities LLC are serving as the book-running managers for the senior notes offering.
Newmont’s shares have gained 53.8% in the past year against the industry’s decline of 13.6%.
On the fourth-quarter earnings call, the company expected attributable gold production of 6.4 million ounces for 2020. For the year, the all-in sustaining cost for gold is projected at $975 per ounce and the cost applicable to sales expectation for gold is pegged at $750 per ounce.
Zacks Rank & Stocks to Consider
Newmont currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the basic materials space are Daqo New Energy Corp. DQ, NovaGold Resources Inc. NG and Commercial Metals Company CMC.
Daqo New Energy has a projected earnings growth rate of 353.7% for 2020. The company’s shares have rallied 80.3% in a year. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
NovaGold has a projected earnings growth rate of 11.1% for 2020. It currently carries a Zacks Rank #2 (Buy). The company’s shares have surged 121.9% in a year.
Commercial Metals currently has a Zacks Rank #2 and a projected earnings growth rate of 21.6% for 2020. The company’s shares have rallied 17.6% in a year.
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