Rio Tinto prices $5 billion of fixed rate bonds

Rio Tinto today priced $2.5 billion of five-year, $1.75 billion of ten-year and $750 million of 20-year SEC registered securities. The bonds were issued by Rio Tinto Finance (USA), with payment of principal and interest fully guaranteed by Rio Tinto plc and Rio Tinto Ltd. Rio Tinto’s Chief Financial Officer Guy Elliott commented: “The success of this bond issue underlines the financial strength and asset quality of Rio Tinto. Last year we raised $38 billion of debt to buy Alcan, creating a world leading business in aluminium.  It had always been our intention to repay the debt from our strong cash flows and from asset disposals and to term out the debt as the opportunity arises. Our disposal program remains firmly on track, and cash flows are continuing to run strongly – as this week’s iron ore price settlement reflects.”

The five-year notes pay a coupon of 5.875% and will mature in July 2013, the ten-year notes pay a coupon of 6.50% and will mature in July 2018 and the 20-year notes pay a coupon of 7.125% and will mature in July 2028.

Credit Suisse, Deutsche Bank Securities, JPMorgan, Morgan Stanley and RBS Greenwich Capital were joint book-running managers.  Société Généralé was lead manager.  ANZ Securities; Banco Bilbao Vizcaya Argentaria; Calyon; Daiwa Securities America; Mitsubishi UFJ Securities and Mizuho International were co-managers.  Proceeds from this issuance will be used to repay bank debt drawn for the Alcan acquisition.