Lpc senior lenders back glencores loan refinancing

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Feb 9 Global diversified natural resource company Glencore is expected to wrap up senior syndication of a one-year revolving credit that refinances existing debt by the end of next week after a strong market response, bankers said on Tuesday. Glencore is refinancing a US$8.45bn loan that supports the company's trading activities, and was agreed in May 2015. The refinancing raised around US$8.5bn from Glencore's top lenders. The company may reduce the facility slightly but the deal is unlikely to be below US$8bn, bankers said. Glencore's core relationship banks backed the deal despite commodity markets volatility and 34 banks committed US$250m each to the loan.

Glencore did not immediately comment. The loan is expected to be launched to a wider general syndication in April after Glencore releases its results by active bookrunners ABN AMRO, HSBC, ING, Bank of Tokyo-Mitsubishi UFJ and Santander.

The existing loan was part of a bigger US$15.25bn financing that was arranged in May 2015, which also included a US$6.8bn, five-year revolving credit facility that will stay in place. Pricing on the new loan is very competitive, a banker said. Last year's financing paid margins of 40-45bp over Libor, but the market has moved against mining companies in the interim.

Glencore is rated Baa3/BBB- after recent credit rating downgrades from Moody's and Standard & Poor's (S&P) in December 2015 and February 2016 respectively. Moody's said that the pricing environment in the mining industry would remain unfavourable in 2016-17 as a reason for its downgrade and S&P cited material challenges to the mining industry. Other recent loans for similarly rated European companies have paid around 50bp over Libor.