Fortescue Metals Group Ltd. said Feb. 20 that it secured a US$1.40 billion term loan facility from a group of Chinese, Australian and European financial institutions.

The Australian iron ore producer intends to use the proceeds to redeem a portion of its senior secured notes maturing 2022 through a tender and/or redemption, lowering annual borrowing costs by about US$80 million.

The four-year facility, extendable by an additional year, bears a 1% principle repayment per annum. The group can opt for the early repayment of the facility.

Following the partial repayment of the 2022 senior secured notes, the company will have US$760 million in senior secured notes and US$750 million in senior unsecured notes maturing in 2022. The company will have an additional US$750 million of senior unsecured debt maturing in 2024.