Glencore Closes Senior Phase of Loan Refinancing

Glencore has successfully closed senior syndication of the refinancing of a one-year revolving credit facility after raising US$8.4bn in commitments from a total of 37 relationship banks, a source close to the deal said.

The loan has been scaled back to US$7.7bn ahead of a launch of a wider syndication to a group of around 30 banks scheduled for the second quarter of 2016.

Wider syndication will be aimed at allowing banks that did not participate in senior syndication a chance to take part in the loan as well as scaling back commitments of the senior banks rather than securing incremental amounts for the loan, the source said.

Glencore (GLCNF) is refinancing a US$8.45bn loan that supports the company's trading activities and was agreed in May 2015.

The new facility features a 12-month extension option and a 12-month term out option. The facility does not contain any financial covenants.

Pricing on the loan is in line with expectations, with an overall all-in cost of below 100bp. A small increase in pricing was expected after Glencore's recent downgrade to Baa3/BBB- from Baa2/BBB.

The financing is led by active bookrunners ABN AMRO, Bank of Tokyo-Mitsubishi UFJ, HSBC, ING and Santander.

Glencore said in December that it had increased its current liquidity to more than US$14bn, meaning that the company does not require a facility of the same size as last year.

By Alasdair Reilly