Lead arrangers JP Morgan and Credit Suisse have renegotiated Fortescue Metals’ US$4.95bn secured credit facility.

Under the new terms, the margin for the loan has been reduced from Libor plus 4.25% to Libor plus 3.25%, and the maturity extended from September 2017 to June 30, 2019. The facility has no maintenance covenants but has a 1% penalty in the case of a refinancing.

The Australian iron ore miner retains the ability to make early voluntary repayments and, six months after the closing, there be a leverage ratio calculation, where the margin could be further reduced if the company has reduced its current debt levels.

Fortescue CFO, Stephen Pearce, comments: “The amended terms of the facility reflect the company’s improving credit profile, with the ability to realise further savings in interest costs as leverage decreases through debt reduction and increased earnings.”

CEO Nev Power adds: “The result again demonstrates the market’s confidence in our strategy of ramping up production and then progressively repaying the debt that has funded our expansion.”

Fortescue has been readjusting its debt of late and recently said that, in December, it would repay US$1bn of US$2.04bn in senior unsecured notes, saving US$70mn per year in interest payments. The company expects to retire the remaining US$1.04bn before the date of maturity, subject to market conditions.