Atlas to refinance $300M bonds

MANILA, Philippines - Atlas Consolidated Mining and Development Corp. is set to refinance $300 million worth of existing bonds of its wholly-owned subsidiary Carmen Copper Corp. in the form of a subordinated loan with warrants.

In a disclosure to the local bourse, the company said its board of directors approved the refinancing of the debt after extensive review of its capital raising and financing options.

“The Board and Management of Atlas Mining have identified refinancing as the most suitable plan for the company to discharge its existing debt liabilities in full given the current copper price and financial market conditions,” the company said.

Under the approved plan, Carmen Copper’s existing bonds due in March 2017 and additional shareholder advances to the company will be converted into up to $500 million of debt at Carmen Copper.

The term of the loan will be seven years with an option to pre-pay after five years and will be subordinated to existing bank creditors.

The coupon payments on the loan will be initially lower than the existing bond maturing in 2017 and comprise step up payments to match Carmen Copper’s ability to generate future cashflows.

Warrants will be issued to incentivize the investors to participate in the transaction and will be priced at P4.38, the 90-day value-weighted average share price of the company.

Meanwhile, Atlas trimmed its nine-month net loss to P470 million on the back of higher shipment volumes.