Glencore share prices rises as it launches refinancing of $8.45bn loan
Shares in commodities miner and trader Glencore soared to the top of the FTSE 100 today, after it announced a refinancing deal to replace its $8.45bn one-year revolving credit facility that it initially signed in May 2015.
In this initial pre-syndication phase, the company said it's received commitments from senior banks for $8.4bn, representing an increase from 37 banks of close to $3bn more than existing levels.
Glencore added it will open up the transaction to some 30 additional banks during the second quarter of this year.
The facility reportedly supports the company's trading activities. This area is increasingly vital, because the company says it's cushioned the impact of tumbling commodity prices, which have dented the profitability of its mining operations.
Read more: Glencore shares slide as copper production falls
The company's shares rose as much as 10.1 per cent to 113.35p per share this morning.
Analysts also applauded Glencore's restructuring efforts, however they flagged the increasingly uncertain outlook for commodity prices.
"While shares have been supported by Glencore’s restructuring efforts, we remain cautious, as the business remains highly levered to an unclear commodity price environment," Daniel Aitkenhead, Nicolas Ziegelasch, head of equity research at Killik & Co., said.
The new facility remains unsecured, containing a 12-month extension option and 12-month borrower's term-out option, thereby extending the final maturity to May 2018.
Active bookrunners on the deal were ABN AMRO, Bank of Tokyo Mitsubishi, HSBC, ING and Santander.
[charts-share-price id="99"]