Alcoa Corporation, through its wholly-owned subsidiaries, has completed a private placement of senior notes totaling $2.6 billion. The offering consists of two tranches: $1.5 billion in notes due 2034 and $1.1 billion in notes due 2036. The net proceeds are intended to finance the cash portion of the company's previously announced acquisition of certain interests from South32 Limited.
Key Details
- Offering Breakdown: The offering includes $1.5 billion of 6.625% senior notes due 2034 and $1.1 billion of 6.875% senior notes due 2036.
- Use of Proceeds: Net proceeds, combined with cash on hand, will be used to fund the approximately $3.1 billion cash consideration for the proposed acquisition of bauxite, alumina, and aluminum smelter operations from South32 Limited.
- Contingency Clause: The notes are subject to a special mandatory redemption at 100% of their initial issue price if the acquisition is not consummated on or before June 29, 2027 (subject to extension).
- Financing Update: In conjunction with the offering, Alcoa terminated its commitments under a 364-day bridge term loan facility that was previously established for the acquisition.