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Pressure on the mining industry amid a global economic slowdown has not deterred a handful of mining companies from tapping the high-yield market with five deals emerging in recent weeks.

The flurry of deals are hitting as returns on the sector are starting to shrink. The metals and mining sector of the Barclays US high-yield index has returned -1.34% in May to date, underperforming the overall market's -0.84%.

Commodities are falling as growth slows in major production centers likeChina and India, while fears about Greece have heightened risk aversion across the broader markets.

China's industrial output slowed to 9.3% in April, down from 11.9% in March and 13.4% in April 2011. India's industrial production contracted by 3.5% in March from the year earlier. Three-month copper hit a four-month low on Wednesday.

"For the mining sector, we are at a point where there are questions about global economic growth, so people have backed away," said one investor.

Not surprisingly, issuers are paying up to get their deals through.

Take Inmet Mining, a Canadian mid-tier global mining company with a primary focus on copper and zinc mining. Inmet has a market capitalization of $3.5 billion and reported EBITDA of $600 million.

It tapped the market on Tuesday with a $1.5 billion sale of eight-year non-call four senior notes. Proceeds of the deal, rated B1/B+, will be used to fund capex including development capital for the Cobre Panama mine, and general corporate purposes.

The deal was originally sized at $1 billion but as price talk of 8.25%-8.50% emerged, leads JP Morgan and Credit Suisse upsized the notes by $500 million.

At that size, however, investors demanded more yield.

"Inmet has struggled from the beginning," said one high-yield investor. "The problem with it is it's a development deal. So I'm essentially lending them venture capital, real estate money for a mere 8.5%. It's not enough."

This kind of pushback resulted in leads widening price talk to 8.75%-9% to entice buyers. It was heard that three accounts anchored the book at this level, putting in triple digit orders. The deal ended up pricing at 8.75% at 98.584 to yield 9%.

PAYING A PREMIUM

Inmet's deal comes after Thompson Creek's $200 million Caa2/CCC+ rated seven-year non-call four senior offering, which priced two weeks ago at a high 12.50% yield through JP Morgan, Deutsche Bank and RBC.

Last May, the company was able to achieve a 7.375% coupon on a high-yield bond.

Both issues were used to finance development of the Mt Milligan copper-gold mine, which has since been hit by flat molybdenum production and falling prices.

On Friday, Molycorp, a rare metals mining company, was slated to price a $650 million eight-year non-call four senior secured offering, rated B2/B. Morgan Stanley and Credit Suisse are joint books on the deal, which was talked at 9.5%-9.75%.

Proceeds will be used to finance a part of the cash portion of the Neo Material Technologies acquisition.

HudBay Minerals is in the market with a B3/B rated $400 million eight-year non-call four senior notes offering, talked at 9.75% area, through BofA Merrill sole books. Proceeds will be used for general corporate purposes, development projects in Manitoba and, if approved, the development of the Constancia mining project in Peru. HudBay Minerals is an integrated mining company focused on copper, gold and silver.

On Thursday, Allied Nevada Gold announced a CAD400 million seven-year non-call four senior unsecured notes offering, rated B3/B, through Scotia and GMP joint books to fund the expansion of the Hycroft Mine in Nevada.

Allied Nevada Gold is a US-based gold and silver producer focused on mining, development and exploration properties in Nevada. T

The deal, which was talked at 8.75%-9%, will be swapped into $400.4 million with an effective interest rate of 8.375%.

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