NOTE 10-FINANCING:

Long-term debt:

	As of December 31,
(in millions)	2012			2011
1.763% Mitsui credit agreement due 2013 (Japanese LIBO rate plus 1.25% (2.02% at December 31, 2011))	$	10.0		$	20.0
6.375% Notes due 2015 ($200 million face amount, less unamortized discount of $0.4 million and $0.6 million at December 31, 2012 and 2011, respectively)	199.6			199.4
5.375% Notes due 2020 ($400 million face amount, less unamortized discount of $1.6 million and $1.9 million at December 31,2012 and 2011, respectively)	398.4			398.1
3.50% Notes due 2022 ($300 million face amount, less unamortized discount of $1.0 million at December 31, 2012)	299.0			—
9.25% Yankee bonds—Series B due 2028	51.1			51.1
7.50% Notes due 2035 ($1,000 million face amount, less unamortized discount of $14.7 million and $14.9 million at December 31, 2012 and 2011, respectively)	985.3			985.1
6.75% Notes due 2040 ($1,100 million face amount, less unamortized discount of $8.0 million and $8.0 million at December 31,2012 and 2011, respectively)	1,092.0			1,092.0
5.25% Notes due 2042 ($1,200 million face amount, less unamortized discount of $21.5 million at December 31, 2012)	1,178.5			—
Total debt	4,213.9			2,745.7
Less, current portion	(10.0		)	(10.0		)
Total long-term debt	$	4,203.9		$	2,735.7

The bonds, referred above as “Yankee bonds”, contain a covenant requiring Minera Mexico to maintain a ratio of EBITDA to interest expense of not less than 2.5 to 1.0 as such terms are defined by the facility. At December 31, 2012, Minera Mexico was in compliance with this covenant.

The Mitsui credit agreement is collateralized by pledges of receivables on 31,000 tons of copper per year. The Mitsui agreement requires the Company to maintain a minimum stockholders’ equity of $750 million and a specific ratio of debt to equity. Reduction of Grupo Mexico’s direct or indirect voting interest in the Company to less than a majority would constitute an event of default under the Mitsui agreement. At December 31, 2012, the Company was in compliance with these covenants.

In July 2005, the Company issued $200 million 6.375% Notes due 2015 at a discount of $1.1 million and $600 million 7.5% Notes due 2035, at a discount of $5.3 million. The notes are senior unsecured obligations of the Company. The Company capitalized $8.8 million of costs associated with this facility and its unamortized balance is included in “Other assets”, non-current on the consolidated balance sheet. The net proceeds from the issuance and sale of the notes were principally used to repay outstanding indebtedness of the Company and the balance was used for general corporate purposes. The indentures relating to the notes contain certain covenants, including limitations on liens, limitations on sale and leaseback transactions, rights of the holders of the notes upon the occurrence of a change of control triggering event, limitations on subsidiary indebtedness and limitations on consolidations, mergers, sales or conveyances. Certain of these covenants cease to be applicable before the notes mature if the issuer obtains an investment grade rating.

On May 9, 2006, the Company issued an additional $400 million 7.5% notes due 2035. These notes are in addition to the $600 million of existing 7.5% notes due 2035 that were issued in July 2005. The current transaction was issued at a spread of +240 basis points over the 30-year U.S. Treasury bond. The original issue in July 2005 was issued at a spread of +315 basis points over the 30-year U.S. Treasury bond. The notes were issued at a discount of $10.8 million. The Company capitalized $3.2 million of cost associated with this facility and its unamortized balance is included in non-current “Other assets, net” on the consolidated balance sheet. The Company used proceeds from the May 2006 issuance for its expansion programs.

The notes issued in July 2005 and the new notes issued in May 2006 are treated as a single series of notes under the indenture, including for purposes of covenants, waivers and amendments. The Company has registered these notes under the Securities Act of 1933, as amended.

On April 16, 2010, the Company issued $1.5 billion of fixed-rate unsecured notes with a discount of $10.3 million, which is being amortized over the term of the related debt. Net proceeds were used for general corporate purposes, including the financing of the Company’s capital expenditure program. The $1.5 billion fixed-rate senior unsecured notes were issued in two tranches, $400 million due in 2020 at an annual interest rate of 5.375% and $1.1 billion due in 2040 at an annual interest rate of 6.75%. Interest on the notes will be paid semi-annually in arrears. The notes will constitute the Company’s general unsecured obligations and the series of notes will rank pari passu with each other and will rank pari passu in right of payment with all of the Company’s other existing and future unsecured and unsubordinated indebtedness. Also, related to these notes the Company has deferred $8.2 million of costs associated with the issuance of this facility, which its unamortized balance is included in “Other assets” non-current in the consolidated balance sheet and is being amortized as interest expense over the life of the loans.

In connection with the transaction, on April 16, 2010, the Company entered into a base indenture with Wells Fargo Bank, National Association, as trustee, as well as a first supplemental indenture and a second supplemental indenture which provide for the issuance, and set forth the terms of, the two tranches of notes described above. The indentures contain covenants that limit the Company’s ability to, among other things, incur certain liens securing indebtedness, engage in certain sale and leaseback transactions, and enter into certain consolidations, mergers, conveyances, transfers or leases of all or substantially all the Company’s assets.

On November 8, 2012, the Company issued $1.5 billion of fixed-rate unsecured notes with a discount of $22.5 million, which is being amortized over the term of the related debt. Net proceeds will be used for general corporate purposes, including the financing of the Company’s capital expenditure program. The $1.5 billion fixed-rate senior unsecured notes were issued in two tranches, $300 million due in 2022 at an annual interest rate of 3.5% and $1.2 billion due in 2042 at an annual interest rate of 5.25%. Interest on the notes will be paid semi-annually in arrears. The notes will constitute the Company’s general unsecured obligations and the series of notes will rank pari passu with each other and will rank pari passu in right of payment with all of the Company’s other existing and future unsecured and unsubordinated indebtedness. Also, related to these notes the Company has deferred $7.7 million of costs associated with the issuance of this facility, with the unamortized balance included in “Other assets” non-current in the consolidated balance sheet and is being amortized as interest expense over the life of the loans.

Pursuant to the April 16, 2010 base indenture between the Company and Wells Fargo Bank, National Association, as trustee, the Company and the trustee entered into supplemental indentures, which provide for the issuance, and set forth the terms of, the 2022 Notes and 2042 Notes, respectively. The supplemental indentures contain covenants that limit the Company’s ability to, among other things, incur certain liens securing indebtedness, engage in certain sale and leaseback transactions, and enter into certain consolidations, mergers, conveyances, transfers or leases of all or substantially all the Company’s assets.

The Company has registered the 2010 and 2012 notes under the Securities Act of 1933, as amended. The Company may issue additional debt from time to time pursuant to the base indenture.

If the Company experiences a Change of Control Triggering Event (as defined in the indentures governing the 2005, 2006, 2010 and 2012 notes), the Company must offer to repurchase the notes at a purchase price equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any. A Change of Control Trigger Event means a Change of Control (as defined) and a rating decline (as defined), that is, if the rating of the notes, by at least one of the rating agencies shall be decreased by one or more gradations.

At December 31, 2012, the Company was in compliance with the covenants of the 2005, 2006, 2010 and 2012 notes.

Aggregate maturities of the outstanding borrowings at December 31, 2012, are as follows:

Years	*Principal Due ()**
	(in millions)
2013	$	10.0
2014	—
2015	200.0
2016	—
2017	—
Thereafter	4,051.2
Total	$	4,261.2

(*)Total debt maturities do not include the debt discount valuation account of $47.3 million.

At December 31, 2012 and 2011, other assets included $5.1 million and $5.2 million, respectively, held in escrow accounts as required by the Mitsui’s loan agreement. The funds are released from escrow as scheduled loan repayments are made.

At December 31, 2012 and 2011, the balance of capitalized debt issuance costs was $25.9 million and $18.8 million, respectively. Amortization charged to interest expense was $1.3 million, $0.5 million and $0.4 million in 2012, 2011 and 2010, respectively.