Glencore IPO Helps Bonds as Convertible Holders Double Money
This article is for subscribers only.
Glencore International AG’s initial public offering is positive for bondholders, especially in its convertible bond because they will almost double their money, according to analysts at RBC Capital Markets.
Glencore in December 2009 sold $2.2 billion of 5 percent notes due 2014 that become convertible into stock when the Baar, Switzerland-based commodities trader sells shares. They were sold to strategic investors at an implied company valuation of about $35 billion which has now increased to as much as $60 billion, said Miriam Hehir at the London securities unit of Canada’s biggest bank.