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Nexa to raise US$500mn in overseas bond issue

Bnamericas Published: Tuesday, June 16, 2020
Nexa to raise US$500mn in overseas bond issue

Brazilian zinc producer Nexa Resources plans to raise US$500mn from the issue of overseas bonds. 

The bonds will be due in January 2028 and bear annual interest of 6.5%. 

"Nexa expects to use the proceeds of this offering to repay a portion of its existing financial indebtedness and the remainder, if any, for general corporate purposes," the company said in a statement. 

Nexa currently owns and operates five underground mines – three in the central Andes of Peru and two in Brazil’s Minas Gerais state – and is developing the Aripuanã project as its sixth underground mine in Brazil’s Mato Grosso state.

"The transaction will improve Nexa's debt maturity profile and will help reduce funding costs and interest expenses, with no impact on leverage," said Moody's, which rated the issue ‘Ba2’. 

DOWNWARD REVISION 

In May, Nexa reduced its capex plan for this year by 27% to US$300mn in order to protect its cash position amid the coronavirus crisis. 

Nexa, the world’s fourth largest zinc concentrate producer, also cut its 2020 estimate for production and sales due to the pandemic.

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