Nexa Resources to issue new senior unsecured notes

LUXEMBOURG - Nexa Resources S.A. (NYSE: NEXA), a significant polymetallic producer with a market capitalization of $814 million, revealed its plan to offer new senior unsecured notes, guaranteed by its subsidiaries. According to InvestingPro data, while the company isn’t currently profitable, analysts expect net income growth this year. The move is aimed at funding a cash tender offer for its existing notes due in 2027 and 2028, as well as for general corporate purposes.

The company stated that the net proceeds from the note offering would primarily be used to purchase its existing notes through tender offers announced today. This debt management initiative comes as the company maintains a debt-to-equity ratio of 2.28 and generates substantial EBITDA of $608.5 million. Any notes not repurchased in the tender offers will be redeemed. Should any proceeds remain, they will be allocated for general corporate activities, including liability management transactions.

These new notes will be unsecured obligations of Nexa and will receive full and unconditional guarantees from Nexa Resources Cajamarquilla S.A. and Nexa Recursos Minerais S.A. They will rank equally with all other unsecured and unsubordinated debt obligations of the guarantors.

Nexa has clarified that the notes will not be registered under the U.S. Securities Act of 1933 and will be available only to qualified institutional buyers or non-U.S. persons in compliance with specific regulations. This announcement does not constitute an offer to sell or a solicitation of an offer to buy any securities.

The company, with over 65 years of experience in the mining and smelting industry in Latin America, operates multiple long-life underground and open pit mines in Peru and Brazil, along with three smelters. According to Wood Mackenzie, Nexa was among the top five global producers of mined zinc and metallic zinc in 2024.

This press release contains forward-looking statements regarding Nexa’s plans, which involve risks and uncertainties that could cause actual results to differ materially. These risks include market conditions, economic factors, and operational risks. InvestingPro analysis suggests the stock is currently undervalued, with additional insights available in the comprehensive Pro Research Report, which provides deep-dive analysis of Nexa’s financial health and growth prospects. The company has disclaimed any obligation to update these forward-looking statements unless required by law.

The information regarding Nexa’s new senior unsecured notes offering is based on a press release statement from the company.

In other recent news, Nexa Resources reported its Q4 2024 earnings, revealing a mixed performance with an EPS of $0.3041, which fell short of the expected $0.3288. However, the company exceeded revenue forecasts, achieving $716.68 million against the anticipated $698.65 million. For the entire year, Nexa’s revenue increased by 8% to $766 million, supported by significant production increases in zinc, copper, lead, and silver, particularly from the Aripuana mine. Moody’s recently affirmed Nexa’s Ba2 rating, revising the outlook to stable, reflecting improved operating performance and a reduction in gross leverage. Nexa’s liquidity position at the end of 2024 was robust, with a cash balance of $640 million and $320 million in available credit facilities. The company also extended its debt maturity profile by issuing $600 million in cross-border bonds due in 2034. Additionally, Nexa has implemented a new dividend policy targeting up to 20% of free cash flow pre-events, with a minimum payout of $0.08 per share. These developments underline Nexa’s strategic efforts to enhance production, manage debt effectively, and provide shareholder returns.

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