Sept. 11, 2014, 4:33 p.m.
The Australian arm of multinational mining giant Glencore surprised investors on Thursday by announcing a debut deal to tap the local debt capital market for about half a billion dollars. Pricing has begun, with the offer due to close within 48 hours on Friday.
Glencore Australia Holdings announced its inaugural five-year benchmark issue with initial pricing guidance of about 140 basis points over the five-year swap rate, or about 4.85 per cent.
The notes are expected to be rated Baa2 by Moody's and BBB by Standard & Poor's.
While the company did not put a number on the amount of capital it hopes to raise, five-year benchmark issues typically raise in the vicinity of $500 million.
The joint lead managers on the deal are ANZ Banking Group, National Australia Bank, and UBS Investment Bank Switzerland.
"This deal is big news for the local debt capital market," National Australia Bank head of corporate bond origination Brad Scott said.
"It is always exciting to see a big international make a debut offer, but it is particularly encouraging at the moment. Amid subdued credit growth, 2014 has so far been a much quieter year for new corporate issues than 2013," Mr Scott said.
The local deal, which investors say has been in the works for about a year, comes after Glencore launched a seven-year €600 million ($846 million) bond in the European market overnight.
Glencore is a $US48.5 billion ($52.9 billion) company that listed with $US38 billion of long-term debt obligations.
The company has several major assets in Australia, is the nation's largest coal producer, and is reportedly a front-runner to acquire BHP Billiton's Nickel West assets. noscript>
SDL Price at posting:
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