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By Alasdair Reilly and Mamidipudi Soumithri
LONDON, Feb 17 (Reuters) - Miner and trade house Glencore Plc has raised $8.4 billion in commitments as part of an early refinancing of its short-term debt, sending its shares up more than 10 percent on Wednesday.
Glencore’s net debt of about $30 billion - one of the highest levels in the sector - has come under scrutiny as multi-year prices for commodities such as copper and coal pressure its finances.
Ratings agency Moody’s Investors Service downgraded Glencore’s credit rating to one notch above “junk” in December.
“The market’s taken it well, it’s demonstrated that they are able to secure debt in this challenged environment,” Investec analyst Marc Elliott said.
The company said it signed $7.7 billion of commitments to its new revolving credit facility, which will replace its existing $8.45 billion loan that was agreed last May.
The new loan was scaled back ahead of a launch of a wider syndication to a group of around 30 banks scheduled for the second quarter of 2016.
Wider syndication will be aimed at allowing banks that did not participate in senior syndication a chance to take part in the loan as well as scaling back commitments of the senior banks rather than securing incremental amounts for the loan, a source close to the deal said.
Pricing on the loan is in line with market expectations, with an overall all-in cost of below 100 basis points. The market expected a small increase in pricing after Glencore’s recent downgrade.
The financing is led by active bookrunners ABN AMRO, Bank of Tokyo-Mitsubishi UFJ, HSBC, ING and Santander.
Glencore said in December it had increased its current liquidity to more than $14 billion, meaning that the company does not require a facility of the same size as last year.
Shares in Glencore were trading up 10.3 percent at 113.50 pence at 1039 GMT on the London Stock Exchange, putting them at the top of the blue-chip FTSE 100 index. The shares are up more than 25 percent so far this year after falling around 70 percent in 2015.
Editing by Christopher Mangham and Susan Thomas