Glencore tells investors debt is being cut, trading robust – by DMITRY ZHDANNIKOV, SARAH MCFARLANE AND OLIVIA KUMWENDA-MTAMBO (Reuters U.S. – October 1, 2015)

LONDON – Glencore has told investors it is on track to cut debt and has shown new data about its secretive trading unit in a fresh attempt to dispel market worries over its finances which have knocked 70 percent off its share price this year.

Its stock gained as much as 6 percent on Thursday after credit analysts from Barclays said a meeting they had organized with members of Glencore’s management on Wednesday, including the co-head of corporate finance Carlos Perezagua and the head of strategy Paul Smith, managed to address many concerns of investors and bondholders.

But it then tumbled back into negative territory, extending the week’s losses after suffering a 30 percent plunge on Monday. At 1238 GMT it traded down 3.76 percent on the day.

“It was an encouraging meeting (on Wednesday) as we believe it helped to clear up many misconceptions and confusion we believe is currently in the market around commodity trading,” credit analysts from Barclays said in a note on Thursday.

A source close to Glencore confirmed that the meeting had mainly focused on the balance sheet and debt reduction plan.

The market jitters over Glencore reflect concerns over the Swiss-based trader and miner’s ability to service its heavy debts, accumulated after an asset buying spree, following the collapse in global commodity prices over the past year.

“The market is telling us that Glencore is in financial distress. Our credit colleagues believe this is premature and do not have those concerns – they do not think Glencore is at risk of imminent default,” the Barclays note said, adding it believed the company could retain its investment grade credit rating.

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