Will Ferrexpo Plc outperform Rio Tinto plc, Glencore PLC and Anglo American plc after today’s news?

Does Ferrexpo Plc (LON:FXPO) (FXPO.L) have more investment appeal than Rio Tinto plc (LON:RIO) (RIO.L), Glencore PLC (LON:GLEN) (GLEN.L) and Anglo American plc (LON:AAL) (AAL.L)?


The Ferrexpo Plc (LON:FXPO) (FXPO.L) share price has gained 2% today after it released news regarding a new credit facility. The company has signed a new three year revolving credit facility of $195 million. It was arranged by BNP Paribas and includes a syndicate of 6 international lenders.

The credit facility will be used for general corporate purposes. It will amortize over 8 quarters, with final repayment on 31 December 2020.

The new facility seems to be in line with the company’s strategy to further strengthen its balance sheet. This is in response to continued volatility in commodity markets. The new facility will significantly reduce the company’s average cost of funding, as well as extend its debt maturity profile.

The news seems to have been well-received by investors, judging by the company’s upwards share price move today. In my view, it seems to be a sensible step to take since the outlook for commodity prices continues to be uncertain. It may also improve the financial performance of the company because it could reduce the cost of servicing its debt.

In the last year the Ferrexpo share price has risen 119%. That’s a better performance than other mining stocks such as Rio Tinto plc (LON:RIO) (RIO.L), Glencore PLC (LON:GLEN) (GLEN.L) and Anglo American plc (LON:AAL) (AAL.L). The Rio Tinto share price is up 16%, Glencore has gained 31% and Anglo American has risen 26% over the same one year time period.

In my view, Ferrexpo could have investment appeal for the long run. Its shares have performed exceptionally well in the last year, with the company seemingly making progress with its strategy. Outperformance on that scale may not recur in the next year, but I’m nevertheless relatively optimistic about its investment potential over the long run. Today’s news appears to be a further positive step for the company and I’m upbeat about its future outlook.

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