Vitol SA, the world’s largest independent oil trader, will raise $7 billion of loans this week at the same interest rate as its largest competitor, Glencore Xstrata (GLEN) Plc, according to three people with knowledge of the transaction.
Vitol is completing one- and three-year revolving credit lines that pay initial margins of 80 basis points, or 0.8 percentage point, and 90 basis points more than the London interbank offered rate respectively, according to data compiled by Bloomberg. The rates match those Glencore negotiated on loans with the same maturity obtained in June as part of a $17.3 billion refinancing, the data show.
The world’s largest oil traders including Glencore Xstrata, Trafigura Beheer BV and Mercuria Energy Trading SA increased the size of their revolving loans when they refinanced their debt this year, Bloomberg data show. The companies are taking advantage of banks that are eager to lend to win a share of future business, which is only awarded to those participating in the commodities firms’ credit lines.
Vitol boosted the total size of the loans by $2 billion after it received commitments from about 55 banks that offered funds in excess of the $5 billion originally planned, the people with knowledge of the transaction said. The company is replacing about $6 billion of credit lines, and has reduced the margin on an existing three-year facility, which was extended by one year, from 137.5 basis points more than Libor, the data show.
ING Groep NV, Lloyds Banking Group Plc, Royal Bank of Scotland Group Plc, Societe Generale SA and Standard Chartered Plc are arranging the debt sale, the data show. A spokeswoman for Vitol, who asked not to be named citing company policy, declined to comment on the financing.
Peter Grauer, the chairman of Bloomberg LP, the parent of Bloomberg News, is a non-executive director of Glencore Xstrata.
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