U.S. News

Rio Tinto Raises Funds for Alcan Buyout


U.K.-listed mining company Rio Tinto confirmed on Wednesday it has raised the amount it needs to fund the $38.1 billion takeover of Canadian aluminium producer Alcan, despite the recent turbulence in the credit markets.

A Rio Tinto spokesman told CNBC the deal, which was oversubscribed, will close on Wednesday.

The Financial Times, quoting data from Dealogic data provider, said it on its website that the $40 billion loan was the biggest raised by a U.K.-listed company, and the fourth-largest in the world.

On July 12, a few days after Bear Stearns announced the collapse of two hedge funds because of losses in the subprime sector, Rio Tinto said in a statement that it planned to finance the deal by "newly committed bank facilities underwritten by The Royal Bank of Scotland, Deutsche Bank, Credit Suisse and Societe Generale."

Rio Tinto's long-term credit ratings are well into investment grade territory. The company is rated Aa3 by Moody's and A+ by Standard & Poor's.

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