Item 1.01.
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Entry into a Material Definitive Agreement.
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On April 20, 2018, Freeport-McMoRan Inc. (FCX), and
PT Freeport Indonesia (PTFI) and Freeport-McMoRan Oil & Gas LLC (FM O&G), subsidiaries of FCX, entered into a new revolving credit agreement with JPMorgan Chase Bank, N.A. (JPMorgan), as
administrative agent, Bank of America, N.A., as syndication agent, and each of the lenders and issuing banks party thereto (the Revolving Credit Facility). BNP Paribas, Citibank, N.A., HSBC Bank USA, National Association, Mizuho Bank,
Ltd., Sumitomo Mitsui Banking Corporation, The Bank of Nova Scotia, MUFG Bank, Ltd. and Bank of Montreal, Chicago Branch, were
co-documentation
agents for the Revolving Credit Facility. JPMorgan, Merrill
Lynch, Pierce, Fenner & Smith Incorporated, BNP Paribas Securities Corp., Citigroup Global Markets Inc., HSBC Securities (USA) Inc., Mizuho Bank, Ltd., Sumitomo Mitsui Banking Corporation, The Bank of Nova Scotia, MUFG Bank, Ltd. and Bank
of Montreal, Chicago Branch were joint lead arrangers and joint bookrunners for the Revolving Credit Facility. The Revolving Credit Facility is unsecured.
The
Revolving Credit Facility replaces FCXs existing revolving credit agreement dated as of February 14, 2013 (as amended, modified, supplemented, and amended and restated), among FCX, PTFI, FM O&G, the lenders and issuing banks
party thereto, JPMorgan, as administrative agent, and Bank of America, N.A., as syndication agent. FCX elected, in accordance with the terms of the existing revolving credit agreement, to terminate all of the commitments under the existing revolving
credit agreement, with such termination effective April 20, 2018. The Revolving Credit Facility provides for a five-year, unsecured revolving credit facility, under which FCX, PTFI and FM O&G may obtain loans in an aggregate principal
amount of up to $3.5 billion (which is available for up to $1.5 billion in letters of credit), with PTFIs borrowing capacity limited to $500 million. The Revolving Credit Facility matures on April 20, 2023. Amounts repaid
under the Revolving Credit Facility prior to the maturity date may be reborrowed, subject to satisfaction of the borrowing conditions. As of April 20, 2018, FCX had no borrowings outstanding under the Revolving Credit Facility and approximately
$13 million in letters of credit issued.
Interest on loans made under the Revolving Credit Facility will, at the option of FCX, PTFI or FM O&G, be
determined based on the adjusted LIBO rate or the alternate base rate (each as defined in the Revolving Credit Facility) plus a spread to be determined by reference to a grid based on FCXs credit ratings.
The Revolving Credit Facility contains various negative covenants that, among other things, restrict, subject to certain exceptions, the ability of FCXs
subsidiaries that are not borrowers or guarantors to incur additional indebtedness (including guarantee obligations) and FCXs ability or the ability of FCXs subsidiaries to: create liens on assets; enter into sale and leaseback
transactions; engage in mergers, liquidations and dissolutions; and sell assets. In addition, the financial covenants under the Revolving Credit Facility require FCX to maintain (1) a total leverage ratio not to exceed 3.75 to 1.00 and
(2) an interest expense coverage ratio of not less than 2.25 to 1.00. The Revolving Credit Facility also contains customary affirmative covenants and representations.
If any subsidiary of FCX (other than a borrower under the Revolving Credit Facility) guarantees any other bank credit facility of FCX or other senior indebtedness of
FCX, the Revolving Credit Facility will be unconditionally guaranteed by such subsidiary with certain specified exceptions for foreign subsidiaries and foreign subsidiary holding companies. PTFIs aggregate liability exposure under the
Revolving Credit Facility is capped at $500 million.
Certain of the lenders and agents under the Revolving Credit Facility, and their respective affiliates
have in the past engaged, and may in the future engage, in transactions with FCX and its affiliates, and have in the past performed, and may in the future perform, services, including commercial banking, financial advisory and investment banking
services, for FCX and its affiliates, in the ordinary course of business for which they have received or will receive customary fees and expenses.
The foregoing
description of the Revolving Credit Facility is not intended to be complete and is qualified in its entirety by reference to the Revolving Credit Facility, a copy of which is attached hereto as Exhibit 10.1, and is incorporated herein by reference.