Glencore International Plc, the commodities trader acquiring Xstrata Plc (XTA), is seeking to refinance about $12 billion of credit lines, according to three people with knowledge of the matter.
The world’s largest publicly traded commodities supplier wants to put in place about $3.5 billion of one-year revolving-credit facilities to replace deals maturing in May, said the people, who declined to be identified because the talks are private. Baar, Switzerland-based Glencore also plans to extend the maturity of an existing $8.34 billion facility by 12 months to 2015 after doing the same last year, the people said.
Glencore hired five banks including Citigroup Inc. (C) and Standard Chartered Plc to manage the transaction, said the people. A spokesman, Simon Buerk, declined to comment.
Glencore said today that its net income before exceptional items rose 7 percent in 2011 to $4.06 billion. Sales jumped 28 percent to $186 billion. Net debt declined by 12 percent to $12.9 billion at the end of December, or two times its earnings before interest, tax, depreciation and amortization.
The company’s revolving credit lines due in May pay an interest margin of 110 basis points, or 1.1 percentage points, more than the London interbank offered rate, according to data compiled by Bloomberg.
The refinancings are separate from a backstop facility of as much as $6 billion that Glencore is seeking to raise as part of its 23 billion-pound ($36 billion) bid for rival Xstrata, the people said.
Glencore decreased 4 percent in London to close at 403.35 pence, the lowest level since Jan. 16. Xstrata, the world’s largest exporter of thermal coal, fell 4.9 percent to 1,137.5 pence, the lowest since Feb. 1.
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