Rio Tinto will reduce its near term maturing gross debt by $1.5 billion after accepting for purchase a total of $141 million of debt under its Dutch Auction Offer and $1.359 billion under its Any and All Offer.
The final aggregate principal amount of Securities purchased under the Any and All Offer that expired on 27 April 2016 was $1.359 billion, including the guaranteed delivery procedures described in the Offer to Purchase.
The Dutch Auction Offer, which commenced on 21 April 2016 and will expire on 18 May 2016, was oversubscribed at 5pm, New York City time, on 4 May 2016 and therefore only $141 million of Dutch Auction Securities will be purchased. No Dutch Auction Securities tendered after the above time will be accepted.
$80.2 million in aggregate principal amount of Rio Tinto Finance (USA) Limited 6.500 per cent Notes due 2018 will be purchased and $60.5 million in aggregate principal amount of Rio Tinto Finance (USA) plc 2.250 per cent Notes due 2018 will be purchased, pursuant to the Dutch Auction Offer. The Dutch Auction Securities purchased will be retired and cancelled and no longer remain outstanding.
The Clearing Premium has been calculated in accordance with the methodology described in the Offer to Purchase and is 30 basis points. The Base Spread less the Clearing Premium is 90 basis points.
| Title of Security | CUSIP/ISIN | Principal Amount to be Purchased | Base Spread (bps) | Clearing Premium (bps) | Base Spread less Clearing Premium (bps) |
| 6.500% Notes due 2018 | 767201AC0/ US767201AC07 | $80,198,000 | 120 | 30 | 90 |
| 2.250% Notes due 2018 | 76720AAM8/ US76720AAM80 | $60,477,000 | 120 | 30 | 90 |
Dutch Auction Securities validly tendered with a Bid Premium that is equal to the Clearing Premium have been accepted for purchase on a prorated basis in the manner described in the Offer to Purchase using a proration factor of 30.12 per cent. All Dutch Auction Securities not accepted as a result of proration and all tenders of Dutch Auction Securities with a Bid Premium in excess of the Clearing Premium have been rejected from the Dutch Auction Offer.
The Reference Yield and the Dutch Auction Total Consideration for each series of the Dutch Auction Securities will be determined on 5 May 2016 at 11am, New York City time, using the methodology described in the Offer to Purchase. The settlement date for the Dutch Auction Securities to be purchased is expected to be 6 May 2016.
Capitalized terms in this announcement have the same meaning as assigned to them in the Offer to Purchase dated 21 April 2016.
The Lead Dealer Managers for the offers are Merrill Lynch, Pierce, Fenner & Smith Incorporated and RBC Capital Markets, LLC. The Co-Dealer Managers are BMO Capital Markets Corp., CIBC World Markets Corp., nabSecurities, LLC and TD Securities (USA) LLC.