OREANDA-NEWS. Rio Tinto is using its strong liquidity position to reduce gross debt through the early repayment of some near term maturing debt, by today commencing cash tender offers to purchase its 2017 and 2018 notes.

Rio Tinto Finance (USA) plc and Rio Tinto Finance (USA) Limited (each a “Company” and together, the “Companies”) are making the offers to purchase the outstanding securities listed in the tables below, each guaranteed by Rio Tinto plc and Rio Tinto Limited (the “Securities”). The terms and conditions of the offers are described in the offer to purchase (the “Offer to Purchase”), dated as of today. Capitalized terms not otherwise defined in this announcement have the same meaning as assigned to them in the Offer to Purchase.

1. Any and All Offer

Rio Tinto Finance (USA) plc is offering to purchase for cash, upon the terms and subject to the conditions set forth in the Offer to Purchase and the Notice of Guaranteed Delivery, any and all of the outstanding Securities listed in the table below (the “Any and All Securities”):

Title of Security

Issuer and Offeror

CUSIP/ISIN

Outstanding Principal Amount

Fixed Spread (bps)

Reference US Treasury Security

Bloomberg Reference Page

2.000% Notes due 2017

Rio Tinto Finance (USA) plc

76720AAB2/ US76720AAB26

$1px00,000,000

30

0.871px% US Treasury Notes due 31 March 2018

PX1

1.621px% Notes due 2017

Rio Tinto Finance (USA) plc

76720AAE6/ US76720AAE64

$1,21px0,000,000

30

0.871px% US Treasury Notes due 31 March 2018

PX1

The offer for the Any and All Securities (the “Any and All Offer”) will expire at 5pm, New York City time, on 27 April 2016, unless extended. The consideration for the Any and All Securities will be determined by the Dealer Managers based on a fixed spread over the reference US Treasury Security, as set forth in the table above, in accordance with standard market practice as of 11am, New York City time, on 27 April 2016. Holders will also receive Accrued Interest on the settlement date for the Any and All Offer. The settlement date for the Any and All Offer is expected to be 29 April 2016 (or 3 May 2016 in the case of Any and All Securities delivered pursuant to the guaranteed delivery procedures described in the Offer to Purchase).

2. Dutch Auction Offer

The Companies are offering to purchase for cash, upon the terms and subject to the conditions set forth in the Offer to Purchase, an aggregate principal amount up to US$1.5 billion less the aggregate principal amount of Any and All Securities purchased in the Any and All Offer of the outstanding Securities listed in the table below (the “Dutch Auction Securities”)

       

Acceptable Bid Spread Range(1)(2)

      

Title of Security

Issuer and Offeror

CUSIP/ISIN

Outstanding Principal Amount

Early Tender Payment(1)

Minimum Spread (bps)

Base Spread (bps)

Reference US Treasury Security

Bloomberg Reference Page

6.500% Notes due 2018

Rio Tinto Finance (USA) Limited

767201AC0/ US767201AC07

$1,750,000,000

$30

50

120

0.875% US Treasury Notes due 31 March 2018

PX1

2.250% Notes due 2018

Rio Tinto Finance (USA) plc

76720AAM8/ US76720AAM80

$1,250,000,000

$30

50

120

0.875% US Treasury Notes due 31 March 2018

PX1

Notes:

  1. Per US$1,000 principal amount of Securities accepted for purchase.
  2. Includes the Dutch Auction Early Tender Payment (as described in the Offer to Purchase).

The offer for the Dutch Auction Securities (the “Dutch Auction Offer”) will expire at 11:59pm, New York City time on 18 May 2016, unless extended (the “Dutch Auction Expiration Date”). However, in order to receive the Dutch Auction Total Consideration (as defined below), which includes the US$30 early tender payment referred to below, holders must tender by 5pm., New York City time on 4 May 2016 (the “Dutch Auction Early Tender Deadline”).

The consideration (“Dutch Auction Total Consideration”) for Dutch Auction Securities validly tendered and not validly withdrawn at or prior to the Dutch Auction Early Tender Deadline and accepted for purchase by the relevant Company will be determined by the Dealer Managers based on a spread over the reference US Treasury Security, as set forth in the table above, in accordance with standard market practice as of 11am, New York City time, on 5 May 2016. The spread will be determined pursuant to a modified “Dutch Auction” procedure as described in the Offer to Purchase.

The consideration for each US$1,000 principal amount of each series of Dutch Auction Securities validly tendered after the Dutch Auction Early Tender Deadline but at or prior to the Dutch Auction Expiration Date and accepted for purchase by the relevant Company is equal to the Dutch Auction Total Consideration for such series minus US$30.

Holders will also receive Accrued Interest on the relevant settlement date for the Dutch Auction Offer.

If the aggregate principal amount of Any and All Securities purchased in the Any and All Offer equals or exceeds US$1,500,000,000, no Dutch Auction Securities will be purchased in the Dutch Auction Offer. If the Dutch Auction Offer is oversubscribed, then the Dutch Auction Securities will be accepted based on the priority and proration described in the Offer to Purchase.

The Companies may elect after the Dutch Auction Early Tender Deadline and at or prior to the Dutch Auction Expiration Date to accept the Dutch Auction Securities validly tendered at or prior to the Dutch Auction Early Tender Deadline. If the Companies exercise this right, the Dutch Auction Securities tendered prior to the Dutch Auction Early Tender Deadline will be settled promptly thereafter, expected to be on or about 6 May 2016. If this right is not exercised, the Dutch Auction Offer will be settled promptly after the Dutch Auction Expiration Date.

Both offers

The offers are subject to the satisfaction of certain conditions set forth in the Offer to Purchase. If any of the conditions are not satisfied or waived by the Companies, the Companies will not be obligated to accept for purchase, purchase or pay for, validly tendered Securities, in each case subject to applicable laws, and may terminate the offers. The offers are not conditioned on the tender of a minimum principal amount of Securities.

Following consummation of the offers, the Securities that are purchased in the offers will be retired and cancelled and no longer remain outstanding.

The above dates and times are subject, where applicable, to the right of the Companies to extend, re-open, amend, and/or terminate the offers, subject to applicable laws. Holders of Securities are advised to check with any bank, securities broker or other intermediary through which they hold Securities when such intermediary would require to receive instructions to participate in, or withdraw their instruction to participate in, the offers before the deadlines set out above.

Holders of Securities are advised to read carefully the Offer to Purchase for full details of and information on the procedures for participating in the offers. Holders of Securities may access the Offer to Purchase and the form of Notice of Guaranteed Delivery (as described in the Offer to Purchase) at http://www.gbsc-usa.com/RioTinto.

The Lead Dealer Managers for the offers are Merrill Lynch, Pierce, Fenner & Smith Incorporated and RBC Capital Markets, LLC. The Co-Dealer Managers are BMO Capital Markets Corp, CIBC World Markets Corp, nabSecurities, LLC and TD Securities (USA) LLC.