KEY POINTS
- NMMC raises $1 billion in its debut bond offering to fund expansion.
- The company secured strong investor interest, with the issuance oversubscribed by over five times.
- Proceeds will be used for investment programs, refinancing debt, and operational expenses.
By announcing its first-ever $1 billion bond offering, Navoi Mining and Metallurgical firm (NMMC) has accomplished a noteworthy milestone. This is the first time a gold mining firm has issued debt globally since June 2023.
Details of the bond issuance
The offering consists of two tranches: $500 million in four-year notes with a 6.70 percent yield and another $500 million in seven-year notes at 6.95 percent.
However, ahead of the issuance, NMMC secured its inaugural credit ratings, earning a BB+ rating from S&P and a BB rating from Fitch, both above Uzbekistan’s sovereign rating.
The bond issuance represents a landmark for the company and the region. Additionally, the order book peaked at $5.5 billion, over five times the target, making it the largest corporate bond offering from the Commonwealth of Independent States (CIS) region since 2020.
Purpose of the bond offering
The funds raised will support NMMC’s investment programs, refinance existing debt, and cover operational expenses.
According to Mining.com, the company aims to take advantage of the lower interest rates secured through the bond issuance to extend the maturity of its debt and reduce financing costs.
“This marks the beginning of a long relationship with global investors,” said Eugene Antonov, NMMC’s first deputy CEO. “This is not just a milestone for NMMC but also a positive development for Uzbekistan, where the company plays a crucial economic role.”
Moreover, NMMC’s bond offering follows a $150 million investment from Mitsubishi UFJ Financial Group (MUFG) to support the company’s expansion efforts.
Strategic role in Uzbekistan
Twelve gold mines in the Samarkand and Navoi areas of Uzbekistan are operated by NMMC. With an estimated 4,500 tonnes of gold reserves, its flagship Muruntau open-pit mine is acknowledged as the largest in the world.
Originally created in the Soviet era, the Muruntau mine currently makes up a sizeable portion of NMMC’s holdings and helped the business produce 2.9 million ounces of gold year in 2023.
With a vast resource base of 148 million ounces, NMMC intends to continue to be one of the world’s largest producers of gold. Its capacity to satisfy operational demands and seek long-term growth will be significantly strengthened by the new bond offering.
