Newmont Bondholder Revolt May Put Barrick on Hook for Debt – by Molly Smith and Danielle Bochove (Bloomberg News – April 10, 2019)

https://www.bloomberg.com/

Barrick Gold Corp. could find itself partially liable for $600 million in additional debt if some Newmont Mining Corp. bondholders have their way.

The creditors are trying to block an amendment Newmont is seeking for a large tranche of notes associated with its operations in Nevada, according to people with knowledge of the matter. The change would prevent liability for those bonds from shifting to Barrick after the companies’ recently announced joint venture in the state is completed.

A majority of holders of Newmont’s $600 million of bonds due 2035 have organized and submitted their rejection to the proposed change, the people said, asking not to be identified as the discussions are private.

The JV with Barrick is not contingent upon Newmont bondholders agreeing to the amendment, Newmont said in a statement last week. But if bondholders succeed, the JV would likely be the new guarantor of the securities, according to CreditSights analysts, putting Barrick on the hook to assume some of the liability.

The 2035 bonds are guaranteed by Newmont USA Ltd., which includes the three Nevada gold mines set to become part of the JV with Barrick. Those assets accounted for about 88 percent of the guarantor’s proven and probable reserves within North America at the end of last year, and the proposed JV would constitute a sale of “all or substantially all” of the guarantor’s assets in Nevada, per the bond prospectus.

For the rest of this article: https://www.bloomberg.com/news/articles/2019-04-10/newmont-bondholders-are-said-to-reject-guarantor-clause-changes

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