Debt

After facing debt turmoil Fortescue Metals (ASX:FMG)is awarded a new debt financing deal from Credit Suisse and JPMorgan.

• $US4.5 billion (AUD$4.3 billion) debt facility refinancing deal is underwritten by Credit Suisse and JPMorgan.
• SMH reports that Deutsche Bank's analysts estimated Fortescue now had available funds of $US6.7 billion after the deal.

Fortescue Metals (ASX:FMG) is seeing debt fears affect its share price on the ASX stockmarket. The shares closed yesterday at a three year low, down 48 cents to $2.99.

• Share prices fell as reports hit the market about Fortescue requesting waiver for all debt covenants for the next 12 months.
• After ASX stockmarket closed, FMG released an announcement:

AAco (ASX:AAC) raised $56.3 million from oversubscribed placements and investors. The said capital will be used to pay a $31.4 million debt. The company stated that after the reduction, AAC will have a net debt of $315 million.

39.6 million shares were placed at $1.42 per share, which represented an 8.4 percent discount form the closing price of $1.55. AAC will contunie share trading today.

Beleaguered investment group CVC Property Fund's (ASX:CJT) debt woes spread to diagnostic imaging company I-Med which owes $890 million, according to Fairfax Media.

CVC has previously faced debt problems with its purchase of travel company Stella Group and Nine Entertainment, and is proposing damage control in the form of a restructure proposal to senior lenders. Majority of bank debt is expected to be converted into equity with the restructure.

Australian property developer, Mirvac Group (ASX:MGR) has secured a new debt facility and refinances its debt. Two portions of debt has been refinanced, due to mature in June and next January into a new $1.85 billion facility. The new multicurrency facility, made up of maturities of one to five years, extends Mirvac's weighted average debt maturity from 2.5 years to 3.6 years.

Commonwealth Bank CEO Ralph Norris, speaking at yesterday's American Chamber of Commerce in Australia luncheon in Sydney, has said that funding costs were to remain high. "All of the banks have a significant portfolio of debt that has been borrowed at lower rates, prior to the start of the crisis, which has continued to roll over at higher rates.

PanAust (PNA), an ASX listed cooper and gold mining company, has refinanced its debt worth $US 80 million with Goldman Sachs JBWere which is due next month. Even though the refinancing extension was expensive, the move increased the share price by 9 cents to 17.5 cents per share. PNA has issued the lender options worth of $75 million and would be forced to issue another $75 million if it fails to repay the debt within 31st of July.

HFA Holdings (HFA), an Australian hedge-fund manager has said; negative media coverage was the cause for its drop in share price and not its financial position. The share price dropped 98 per cent since its peak last July. The share price of HFA closed at 4.9 cents last week which was well down on its $1.10 April 2006 listing price. It is said that, HFA could be compelled to write down $604 million worth of goodwill and management rights from its balance sheet.

Commonwealth Bank (CBA), the largest bank in Australia, defends its highly ranked executives in breach of disclosure rules during the issue of $2 billion capital raising. CBA disagreed by saying that, rules were not broken when it warned a small group of shareholders regarding the bad debt raise before a public announcement. The bank said that the information was not materially significant so there was no need to warn the public earlier.

Rio Tinto (RIO), the third largest mining company in the world has planned to reduce its net debt by $10 billion over 2009. The company has also planned to reduce the controllable operating costs by $2.5 billion within 2010. These plans aim at preserving value by maintaining cashflow and cutting the level of debt.