COMMODITIES trader Glencore has signed a $6bn (£3.7bn) syndicated loan backing its $90bn merger with miner Xstrata after raising nearly $11bn in syndication, banking sources said yesterday.
The loan includes a one-year extension option and was underwritten by Citigroup and Morgan Stanley to show regulators that Glencore has enough working capital to fund the merger. The loan, which can only be drawn if the merger goes ahead, is new money for Glencore and additional exposure for its lenders, although Glencore is not expected to draw on the loan. “The facility is available to be drawn to the extent that the merger gets approval. Whether it is or not is another matter,” a senior banker close to the deal told Reuters. Glencore is also extending $11.85bn of existing loans in a process which is expected to close around 26 April the bankers said. Earlier in the week Glencore said the paperwork on the Xstrata deal was behind schedule.
City A.M. Reporter