Glencore International Plc, the world’s largest publicly traded commodity supplier, hosted a conference call for bond investors today, according to a banker involved in the plans.
Barclays Capital, BNP Paribas SA, ING Groep NV and Lloyds Banking Group Plc arranged the call, which may be followed by a euro bond transaction, the banker said.
Moody’s Investors Service said earlier today that Glencore’s planned acquisition of Canada’s Viterra Inc. is “credit negative” for the company. Baar, Switzerland-based Glencore, which has teamed with Richardson International Ltd. and Agrium Inc. for the takeover, will pay C$3.5 billion ($3.5 billion) for its share of Viterra’s assets and assume debt of about C$1 billion.
“Even with partial new additional external funding, the proposed transaction weakens Glencore’s liquidity position as it intends to use its existing cash resources and available credit facilities,” Gianmarco Migliavacca, a senior analyst at Moody’s, said in an e-mailed report. Glencore’s “aggressive financial and acquisition policy” has been a “recurring credit weakness,” he said.
Glencore, which is also seeking to buy Xstrata Plc in a friendly all-share takeover, dropped 0.8 percent to 401.7 pence at the close of London trading.
Standard & Poor’s today said it’s maintaining its BBB long-term rating on Glencore on creditwatch positive.
“The creditwatch reflects our view that, despite the acquisition of Viterra, Glencore’s risk profile will improve after its merger with U.K. mining company Xstrata,” it said in a statement. Glencore’s net debt may increase by $4.3 billion through the takeover of Viterra, S&P said.