Glencore returns to bond market as sentiment improves – by Neil Hume, Dan McCrum and Gavin Jackson (Financial Times – April 26, 2016)

Mining group Glencore has returned to the bond market for the first time in a year as it continues its recovery from the worst commodity rout in decades.

The FTSE 100 company, led by billionaire Ivan Glasenberg, has been effectively locked out of the debt market since September when concerns about its ability to manage borrowings — which stood at $30bn last June — sent its equity and bond prices into a tailspin.

But a big debt reduction plan, including the sale of a 40 per cent stake in its agricultural business last month, has triggered a sharp rally in Glencore’s share price — making it the second-best performing blue-chip share in London in 2016.

While Tuesday’s bond offering was small, at SFr250m ($257m), it indicated that sentiment towards the mining sector was improving as raw material prices rebound. In recent months, most miners have been focused on buying back existing bonds at depressed prices rather than issuing fresh debt.

“It’s another milestone toward normalisation,” said one person familiar with the bond issue.

Glencore was originally looking to raise SFr150m, according to people familiar with the deal, but the size of the offering was increased to SFr250m because of strong demand. It new bond, which matures in five years, yields 2.25 per cent.

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