Fortescue’s ponzi-bond hints at the end

Wednesday, 18 March 2015

…Initial reports are that Fortescue was marketing the seven-year bond issue, which it can repay after three years, in the “high 7 per cent area” range.

BBY analyst Mike Harrowell said the pricing of the bond issue “is going to be the real story” suggesting a rate of 6 per cent or lower would be favourable given the bonds it plans to retire with the proceeds pay 6 per cent, 6.9 per cent and 8.3 per cent.

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About the author

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.