Rio Tinto commences its $3bn bond buy-back plan

Mining giant Rio Tinto is buying back as much as $3bn of its debt amid a rebounding commodity market.

The company plans to repurchase $2.9bn of notes due in 2018 and will then consider offers from holders of about $5.2bn of bonds maturing in 2020 to 2022.

The buy-back is the company’s second in 2016, with the company repurchasing $1.5bn of debt back in April 2016.

Commodity prices gained in the last week, ending a five-year decline, on gains in prices of raw materials from zinc to soybeans.

In order to cut down on costs and bolster its balance sheet during the commodity slump, Rio sold about $4.7 billion of assets since 2013 and announced a cut in dividend in February 2016.

Source: Bloomberg