LONDON, April 3 (Reuters) - Diversified natural resource company Glencore Xstrata has launched senior syndication of a $15 billion credit facility to replace the $17.34 billion of loans agreed in June last year and cut the cost of its financing, banking sources said.
The new financing, which is being coordinated by BNP Paribas, Citigroup, ING Bank and UniCredit, has launched to existing relationship banks, ahead of a general phase of syndication, the sources said.
Senior phase commitments are due on April 25.
Glencore Xstrata declined to comment.
BBB rated Glencore Xstrata is looking to take advantage of highly competitive loan market conditions to reduce pricing on its financing through its annual refinancing operation.
The new facility is split between a 12-month facility, with a 12-month extension option that pays around 50 basis points (bps) over LIBOR and a five-year facility, with two one-year extension options that pays around 60 bps over LIBOR.
Last year’s financing, which was coordinated by Royal Bank of Scotland, comprised a $5.92 billion 12-month revolving credit facility paying 80 bps, a $7.07 billion, three-year facility paying 90 bps and a $4.35 billion, five-year facility paying 85 bps.
That financing, which was used to back the merger of Glencore and Xstrata, was the largest European corporate refinancing since steel giant ArcelorMittal’s 17 billion euro ($23.41 billion)refinancing in December 2006 that also refinanced the debt of two merger partners. ($1 = 0.7263 Euros) (Editing by Christopher Mangham)