Glencore Sells First Bonds Since Commodity Market Turmoil

  • Miner and trading house issues Swiss franc-denominated notes
  • Company accesses funding as sentiment improves in metals

Glencore Plc sold bonds for the first time since a rout in commodity markets forced it to trim debt and sell assets.

The miner and trader run by billionaire Chief Executive Officer Ivan Glasenberg sold 250 million Swiss francs ($257 million) of securities due in May 2021, according to data compiled by Bloomberg. Its last debt sale, in yen, was about a year ago.

“That’s definitely a positive as the company demonstrates it has access to longer-term funding,” said Max Mihm, a Frankfurt-based portfolio manager at Union Investment, which holds Glencore bonds among its 261 billion euros ($295 billion) of assets as of December. Still, the debt is “expensive relative to past years,” Mihm said.  

Glencore’s return to the bond market underscores improving sentiment in metals and mining, which has helped boost shares in the Bloomberg World Mining Index by 49 percent since touching a 12-year low in January. The company has bolstered its balance sheet by selling and closing mines around the world and won a vote of confidence from lenders when it refinanced an $8.45 billion revolving-credit facility in February.

An official at Glencore confirmed the bond sale. The company’s shares fell 0.5 percent to 151.3 pence as of 10.17 a.m. in London.

The notes sold Tuesday priced to yield 279.5 basis points more than benchmark rates, according to data compiled by Bloomberg. Glencore last sold Swiss franc-denominated bonds in November 2014, when it issued 500 million francs of notes due December 2020 priced to yield 95 basis points more than benchmark rates, the data show.

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