By Abigail W. Adams
Portland, Me., March 21 – Glencore plc priced $500 million in seven-year cash-settled 0% convertible bonds through subsidiary Glencore Funding LLC after the market close on Tuesday at an issue price of 93.25% of their nominal value, representing a yield to maturity of 1%, and an initial conversion price of 25%.
Pricing came at the cheap end of talk for an issue price of 93.25% to 98.25% of the nominal value, representing a yield to maturity of 0.25% to 1%, according to a company news release.
BofA Merrill Lynch is the sole global coordinator for the Regulation S deal and joint bookrunner with BNP Paribas, Barclays Bank plc, HSBC and JPMorgan Securities plc.
The nominal value of each bond will be $200,000.
The initial conversion premium will be 25% of the share reference price, which will be determined after a 10-day averaging period of the company’s shares in sterling on the London Stock Exchange beginning on March 21.
The conversion ratio will be the nominal value of the bonds converted into sterling and divided by the initial conversion price.
The share reference price, conversion price and conversion ratio are expected to be announced on April 5.
Concurrently with the pricing of the bonds, Glencore will purchase cash-settled call options on shares of the company.
The bonds will be listed for trade on the open market of the Frankfurt Stock Exchange. They will be guaranteed by Glencore, Glencore International AG, and Glencore AG.
Glencore and Glencore Funding LLC have agreed to a 90-day lock-up in connection with the offering.
Proceeds will be used to cover the cost of the call options and for general corporate purposes.
Glencore is a Baar, Switzerland-based global diversified natural resource company.
| Issuer: | Glencore Funding LLC (Glencore plc)
|
| Securities: | Non-dilutive cash-settled convertible bonds
|
| Amount: | $500 million
|
| Maturity: | March 27, 2025
|
| Bookrunners: | BofA Merrill Lynch, BNP Paribas, Barclays Bank plc, HSBC and JPMorgan Securities
|
| Coupon: | 0%
|
| Price: | 93.25
|
| Yield: | 1%
|
| Conversion premium: | 25%
|
| Pricing date: | March 20
|
| Settlement date: | March 27
|
| Talk: | Issue price of 93.25% to 98.25% of the nominal value, representing a yield to maturity of 0.25% to 1%
|
| Stock symbol: | LON: GLEN
|
| Stock price: | £368.25 at market close March 20
|
| Market capitalization: | £54.2 billion
|
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