Australia-based miner Fortescue Metals Group Ltd (Fortescue) announced that it has come to an agreement with New York-based Leucadia National Corporation (Leucadia) to repay the whole of the Leucadia unsecured loan notes for an amount of US$715 million.
Leucadia purchased US$100 million of unsecured loan notes in 2006, entitling the company for four percent of the revenues from Fortescue's Cloudbreak and Christmas Creek mines with a maturity date of August 2019. The agreement reduces the overall cost of debt for Fortescue, considering the possible increase in interest payments to Leucadia depending on future iron ore prices.
The agreement is expected to settle by November 2012 and is conditional upon completion of Fortescue's recently announced $4.5 billion credit facility.