Australian lithium miner PLS Group Ltd is returning to the US dollar bond market, seeking to raise $700 million through five-year notes. The debt is being pitched at a yield of about 8%, according to a person familiar with the matter. JPMorgan Chase & Co. is running the offering. The sale comes despite a selloff in junk debt, as investors have grown wary of persistent inflation concerns and the sustainability of the artificial intelligence boom. Yields on a basket of BB-rated securities tracked by Bloomberg recently rose to their highest level since April 2025 before retreating.
The proceeds will fund expansion. PLS earlier this month approved a plan to spend A$1.9 billion ($1.3 billion) to almost double capacity at its flagship Pilgangoora mine in Western Australia, even as lithium prices fall. The company also owns operations in Brazil and South Korea. PLS said the net proceeds will go toward general corporate purposes, including capital expenditure and other growth opportunities.
Moody's Ratings assigned the offering a Ba3 grade, three steps below investment grade, citing the prospect of negative cash flows and higher debt levels during project execution. While the investment is expected to boost scale and lower costs over the long term, Moody's warned it "increases the company's exposure to downside risk from weaker lithium prices and reduces its financial flexibility."
PLS sold US dollar bonds for the first time in April, raising $500 million through notes priced to yield 6.875%. The new offering is expected to price on Tuesday.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing