Australia’s Santos in $800 million bond offering

Santos GLNG first cargo departure – October 2015 (Image courtesy of Santos)

Australia’s Santos, the operator of the GLNG project on Curtis Island, said it remains on target to slice net debt as its latest $800 million bond offering received strong support from global asset managers and insurance companies.

The company priced the 10-year senior fixed-rate bonds with a coupon of 4.125%.

The offer book was six times oversubscribed, and received strong support from a mix of global asset managers and insurance companies from Asia, Australia and Europe, according to a Santos statement.

“The bonds will replace the existing Euro hybrid notes with more efficient long-term debt funding, leading to significant annual interest cost savings and a further reduction in the company’s forecast free cash flow breakeven oil price,” Santos Chief Executive Kevin Gallagher said.

“The company’s focus remains on debt reduction and we are on track to achieve our target of US$2 billion in net debt by end of 2019,” he added.

Santos, which has been struggling to cut a debt burden built up in recent years, has reduced debt by $600 million to $2.9 billion since the start of the year.

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