Glencore Plc finalized a $7.7 billion loan from almost 60 banks as the commodity trader shores up its balance sheet following a raw-materials downturn.
Lenders offered more than $10 billion, according to a person familiar with the matter who asked not to be identified because they’re not authorized to speak publicly. The loan has an all-in cost of 95 basis points above the three-month London interbank offered rate, they said.
“This is a signal that the market is open,” said Paul Gait, a London-based senior analyst at Sanford C. Bernstein & Co., a research arm of AllianceBernstein Holding LP, which oversees $479 billion of assets. “People were concerned that they wouldn’t be able to refinance their debt.”
Chief Executive Officer Ivan Glasenberg has scrapped dividends, raised $2.5 billion in a stock offering and sold assets to allay concerns about Glencore’s borrowings amid lower commodity prices. He intends to cut net debt to as low as $17 billion this year, from $25.9 billion at the end of 2015.
The new loan replaces an $8.45 billion revolving credit facility. The smaller size reflects the current and projected needs of the business, the company said in an e-mailed statement.
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