Rio Tinto seeks to raise up to $9 billion for Arcadium Lithium buyout

Rio Tinto Plc sold $9 billion of US investment-grade bonds Tuesday, raising funds for its just-closed acquisition of Arcadium Lithium Plc.

The debt was sold in eight parts, including 40-year bonds that yield 1.33 percentage point more than Treasuries, according to a person with knowledge of the transaction. In a sign of the strength of demand, investors placed orders for more than $50 billion of bonds at their peak, according to Bloomberg News’ Brian Smith.

Rio Tinto declined to comment.

The miner days ago completed its $6.7 billion purchase of Arcadium, a deal initially funded by bridge financing and intended to be replaced by longer-term debt. Rio Tinto had looked at selling as much as $5 billion of equity to help pay for the acquisitions, but scrapped those plans, Bloomberg News reported last week.

The bond offering came as markets have broadly seen pressure this week. Trade wars are growing more intense, putting pressure on stocks while lifting US Treasury prices. Growing recession fears have kept many potential borrowers on the sidelines, with a series of companies standing down on Tuesday morning. Rio Tinto was among 11 issuers that sold US investment-grade debt Tuesday.

Bank of America Corp., BNP Paribas, Citigroup Inc., JPMorgan Chase & Co., Mizuho Financial Group Inc. and Royal Bank of Canada are leading Rio Tinto’s note sale.

(By Josyana Joshua)