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Glencore Signs $12.8 Billion of Revolving Credit Facilities

Glencore International Plc (GLEN), the commodities trader seeking to acquire Xstrata Plc (XTA), signed $12.8 billion of revolving credit facilities to refinance and extend existing lines, an increase of about 28 percent on what it originally sought.

Glencore obtained a $4.4 billion 14-month credit line, which includes a 10-month extension option, to replace a $3.5 billion, 364-day loan due to mature in May, according to a statement from the Baar, Switzerland-based company. The facility is split between $3.7 billion and $710 million portions, it said. Glencore will pay interest at 125 basis points more than the London interbank offered rate for the loan, according to a person with direct knowledge of the deal.

The largest publicly-traded commodity supplier also extended for one year $8 billion of an existing $8.37 billion revolving credit that was due to mature in May 2014, the company said. It will pay interest at 175 basis points more than Libor for the extension, the person said, who declined to be identified as the terms are private.

The loans were increased from the $10 billion targeted as the deal was “substantially oversubscribed” in syndication, Glencore said. ABN Amro Bank NV, Citigroup Inc., Lloyds Banking Group, Royal Bank of Scotland Group Plc, and Standard Chartered Plc coordinated the refinancing, according to data compiled by Bloomberg, which was provided by a syndicate of 91 banks, the company said.

Participation Fee

The arrangers offered other lenders a participation fee ranging from 45 to 50 basis points depending on the amount committed, the person said. A basis point is 0.01 percentage point. In a revolving credit, money can be borrowed again once it’s repaid.

Glencore also said it signed a $3.1 billion loan backing the proposed merger with Xstrata, scaling back from the $6 billion originally sought, according to data compiled by Bloomberg. It received commitments for about $11 billion in syndication from 31 banks, the company said.

To contact the reporters on this story: Stephen Morris in London at smorris39@bloomberg.net; Louise Meeson in London at lmeeson@bloomberg.net

To contact the editor responsible for this story: Faris Khan at fkhan33@bloomberg.net

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