The new debt arrangement averts the possibility that Australia's No. 3 iron ore producer will breach earnings-related covenants that could have triggered early repayments.

"The facility extends the earliest repayment date for any of the company's debt to November 2015 and removes financial maintenance covenants which applied under previous facilities," Fortescue said.

Shares in the iron ore producer soared in response to the news to close at A$3.50, up A$0.51, or just over 17% on their previous close. At that price Fortescue's equity is worth A$10.9 billion ($11.4 billion).

Fortescue will use the new senior secured credit facility, underwitten by Credit Suisse Group and JPMorgan & Co., to repay about $3.6 billion of existing bank debt.

The Perth-based company, which has about $11.75 billion of debt, said last week it was talking to lenders about the possibility of waivers as it admitted that it was in danger of breaching covenants. Earlier this month, credit rating agencies Standard & Poor's and Moody's Investor Service separately said they were considering downgrading Fortescue's credit rating of because of a sharp fall in forecast revenue resulting from lower iron ore prices.

Iron ore prices have fallen about 50% in the past year and traded below $100 per ton earlier this month as demand from China has weakened. Prices have rebounded in recent days, to about $105, but are still below many iron ore mining companies' long-term forecasts of closer to $120 per ton. Australia's Bureau of Resources and Energy Economics said Tuesday that it expected iron ore prices would average $126 per ton in 2012 and about $101 per ton in 2013. The bureau had forecast 2013 prices of $131 per ton as recently as June.

Fortescue's new facility, which includes no earnings-related covenants, will be used to repay loans including existing bank facilities, a lease facility and export credit. The remaining $900 million of new funds will provide liquidity to the business.

"This is a sledgehammer to crush an ant," Fortescue CEO Neville Power told a conference call on Tuesday. "We wanted...to provide absolute certainty about the state of our financial facilities and our balance sheet."

Fortescue did not disclose the price of the loan. CFO Stephen Price said that it would not result in a "material" increase in the group's cost of financing and suggested it was below the rate on the company's unsecured bonds, which trade at about 7%.

Analysts said that the new debt facility puts an end to speculation that Fortescue would have to raise capital by selling new shares, a move that had met with resistance from its largest shareholder, Andrew Forrest, who owns 32.8% of the company.

The loan will also give the company time to consider asset sales, which are still seen as likely as it seeks to pay down its long-term debt.

"Strong interest has been expressed to Fortescue by a range of parties interested in partnering with Fortescue in certain of its assets," the company said on Tuesday. Power told analysts that he was "not under any pressure," to make sales and would do so only if the prices reflected his assessment of the assets' long-term value. He declined to give any detail about the approaches made to Fortescue or name assets that the company could consider selling.

However, Fitch Ratings Ltd. maintained its negative outlook on the group's debt.

"Fortescue Metals Group Limited's (Fortescue; 'BB+'/Negative) new $4.5 billion debt facility has removed immediate pressures on its credit profile," the Fitch analysts wrote. "Nonetheless, the current downturn in iron ore prices and hence lower operating cash flow means Fortescue will have to take on additional debt to fund its capacity expansion."