Fortescue Metals Group, Australia's third-largest iron ore exporter, is reported to have hired five banks to help it raise $US1.5 billion in loans. This figure would consist of a $1 billion term loan and a $500 million revolving three-year facility.
The Bank of America Merrill Lynch, Royal Bank of Scotland Group, Deutsche Bank, JPMorgan Chase & Co and Credit Suisse Group have been engaged to arrange the loan, which would be used to expand Fortescue's operations in the Pilbara region of Western Australia.
Fortescue would use part of the funding to help pay for the $8.4 billion expansion of its Pilbara iron ore operations. The expansion project would almost triple Fortescue's output, helping meet demand for ore from steel mills in China, the world's fastest-growing major economy.
The proceeds from the term loan will fund the expansion, while the revolving loan will be used for general corporate purposes.