The International Stock Exchange (TISE) has listed US$110 million of uniquely structured corporate copper bonds.

Phoenix Copper Limited (Phoenix), the AIM-quoted USA-focused base and precious metals company, has listed USD110,000,000 Floating Rate Secured Bonds due 2033 on TISE’s Qualified Investor Bond Market (QIBM).

The bonds will pay a floating rate coupon subject to a minimum of 8.5% per annum and a maximum of 20% per annum. The coupon is calculated as the higher of a copper price coupon linked to the copper price on the London Metal Exchange, or an interest rate coupon linked to the US Federal Discount Rate.

Robbie Andrade, Chief Operating Officer at TISE, said: “I’m delighted to welcome Phoenix’s corporate copper bond issuance to listing on TISE. It is especially pleasing to facilitate such an innovative financing arrangement, which further demonstrates the ability to list a wide range of bonds on QIBM. I would like to thank all the transaction parties for bringing this unique listing to fruition on TISE.”

"The coupon is calculated as the higher of a copper price coupon linked to the copper price on the London Metal Exchange, or an interest rate coupon linked to the US Federal Discount Rate."

Phoenix’s flagship operation is The Empire Open-Pit oxide copper deposit located near Mackay, Idaho, which originally operated as an underground mine from 1901 to 1942. Now, Phoenix has issued the bonds to fully fund the construction of the Empire Open-Pit Mine for the cost-effective, environmentally friendly production of copper, gold and silver, and for general working capital.

Paul de Gruchy, Vice-President, Investor Relations at Phoenix, said: “Delivering a more sustainable energy mix globally is going to require greater amounts of copper but currently there is a structural undersupply, and the big challenge facing the industry is financing an increase in production. We believe our innovative financing arrangement presents significant advantages to the Company and its investors and in doing so, supports the transition to net zero.”  

The bonds, which are not convertible, are secured over the Company’s interests in the Empire Mine and have a final maturity date of 10 years.

Mr de Gruchy added: “Our bonds provide investors with the comfort of a debt product that offers a floor to the coupon rate and the potential upside exposure to increases in the price of copper. This is an attractive proposition and will finance bringing the Empire Open-Pit into production with low execution risk given the stable and supportive environment offered by the US. We are very happy with the flexibility and quality of service offered by TISE for listing these bonds and we think that this sort of a mechanism could be used again to fund other projects in the future.”

"We are very happy with the flexibility and quality of service offered by TISE for listing these bonds."

Phoenix’s Listing Agent for the listing on TISE is Carey Olsen Corporate Finance Limited.

Tony Lane, Corporate Partner at Carey Olsen in Guernsey, said: “Our firm is active in the natural resources sector and so it was particularly pleasing to be able to apply our expertise as leading TISE listing agent to that sector, and to assist the launch of this innovative corporate bond. We look forward to helping further issuances to support Phoenix's exciting business operations.”