Fortescue Metals Group Ltd. said March 26 that it launched an offer to redeem US$1.55 billion of its 9.75% senior secured notes due 2022, expected to be settled April 27.

The Australian iron ore miner will use the proceeds of the issue of US$500 million of 5.125% senior unsecured notes due 2023 and a US$1.40 billion term loan facility to repay the notes. The balance will be redeemed from cash.

The refinancing and debt repayment will lower Fortescue's annual borrowing costs by approximately US$130 million.