BHP Billiton may issue new hybrid debt instruments

Miner BHP Billiton will undertake a global debt investor marketing effort across Europe, Asia and the US from 28 September as it considers raising new funds for general corporate purposes, including refinancing existing near-term debt maturities.

The company said that subject to market conditions, it may consider the issuance of multi-currency hybrid capital instruments to institutional debt investors.

“The increasing interest in hybrid capital by global debt investors combined with the relatively low interest rate environment make this an opportune time for BHP Billiton to consider hybrid capital instruments,” it said.

The miner said advantages of hybrid capital instruments include further diversification of its debt investor base, an expected 50% per cent equity/50% debt treatment by the ratings agencies and valuable flexibility to support growth and a solid ‘A’ credit rating through the cycle.

The company is not considering a hybrid that contains any rights to convert the security into BHP Billiton shares.