Fortescue has been making the most of the rise in iron ore prices above $50 per tonne to repay substantial amounts of debt this year. In May it repaid USD$577 worth of 8.25% 2019 bonds and prior to this, the company has made several early debt repayments during 2015. In 2013 the company had gross debt of USD$13 billion and as at June of last year gross debt was $9.5 billion.
Fortescue has now announced it will repay another USD$500 million (AUD$665 million) a little later this month, with the payment to be made from existing cash reserves. On this occasion the debt reduction will be made to its term loan facility and the balance will be reduced from around USD$4.2 billion to USD$3.7 billion. Fortescue chief financial officer, Stephen Pearce said this latest repayment brings total debt repayments made during the 2016 financial year to USD$2.9 billion.