Glencore carries out US$8.4 billion refinancing

Glencore has carried out an early refinancing of its Revolving Credit Facility to replace its existing US$8.45 billion facility.

The move precipitated shareprice spike for the diversified miner, as its stock rose to its highest point in three months.

According to the miner it has already received commitments from its 37 senior banks for US$8.4 billion, which is reportedly US$3 billion above existing commitment levels.

“Reflecting the high oversubscription level, Glencore has currently scaled back and signed in $7.7 billion of such commitments and will now broaden the refinancing via launch of general syndication to some 30 additional banks in Q2 2016,” it said in a company statement.

The facility will remain unsecured, and comes with a 12 month extension option and a 12 month borrower’s term-out option, extending final maturity to 2018.

Analysts have called the support from Glencore’s lenders a show of confidence in the miner despite the ongoing downturn that has seen it and other miners’ ratings downgraded or junked.

Investec analysts called it “a positive development from the company, and whilst not finalised it is encouraging that there remains healthy demand to lend to Glencore,” according to Bloomberg.

“However, we would be surprised if the interest payments will be reduced as the commodity environment has worsened and the company’s credit rating is weaker than a year ago.”

This is a still a major turnaround for the miner after skittishness on the market wiped out billions in value from its stock price.

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