Item 1.01. Entry into a Material Definitive Agreement.
On November 25, 2019, Freeport-McMoRan Inc. (“FCX”), PT Freeport Indonesia and Freeport-McMoRan Oil & Gas LLC, as borrowers, JPMorgan Chase Bank, N.A., as administrative agent, Bank of America, N.A., as syndication agent and each of the lenders and issuing banks party thereto entered into the Second Amendment (“Second Amendment”) to the Revolving Credit Agreement dated as of April 20, 2018, as amended by that certain First Amendment dated as of May 2, 2019, among the borrowers, the administrative agent, the syndication agent, and each of the lenders and issuing banks party thereto (as amended, the “Revolving Credit Facility”).
The changes made pursuant to the Second Amendment include (i) modifying the total leverage ratio from 3.75 to 1.00 to 5.25 to 1.00 during the quarterly periods ending December 31, 2019, through and including June 30, 2021 (returning to 3.75 to 1.00 for the quarterly periods ending on or after September 30, 2021), and (ii) during the period that FCX must maintain a total leverage ratio not to exceed 5.25 to 1.00, modifying the calculation of the total debt component used to determine the total leverage ratio by adjusting the amount of unrestricted cash that may be applied to reduce the amount of total debt from $2.5 billion to $1.25 billion. The Second Amendment provides for no other changes.
As of November 25, 2019, FCX had no borrowings outstanding under the Revolving Credit Facility and $13 million in letters of credit issued, resulting in availability of approximately $3.5 billion, of which approximately $1.5 billion could be used for additional letters of credit.
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 Second Amendment is not intended to be complete and is qualified in its entirety by reference to the Second Amendment, a copy of which is attached hereto as Exhibit 10.1, and is incorporated herein by reference.