Linklaters joins CC on Glencore Xstrata’s first post-merger bond

Linklaters has taken the lead role for Glencore Xstrata on its first post-merger bond issue, confirming the magic circle firm as the combined group’s primary adviser following the $64bn (£42bn) mining tie-up.

Patrick Sheil
Patrick Sheil

City capital markets partner Patrick Sheil headed the team for Glencore Xstrata on the $5bn (£3.3bn) dollar-denominated offering working alongside relationship partner Charlie Jacobs and lead associate Robin Carolan.

Clifford Chance advised arrangers Bank of America Merrill Lynch, BNP Paribas, Credit Suisse and RBS, fielding London-based US securities partner John Connolly, who led with assistance from capital markets partner Adrian Cartwright, mining partner David Lewis and associate Henry Peacock.

The mandate represents Linklaters’ continued relationship with the merged business following longstanding client Glencore’s union with Freshfields Bruckhaus Deringer client Xstrata.

The five-tranche bond comprises three-year, five-year and 10-year fixed-rate notes and three-year and five-year floating-rate notes issued through subsidiary Glencore Funding, with yields ranging from 1.7 per cent to 4.125 per cent. The notes are guaranteed by Glencore Xstrata, Glencore International and Xstrata (Schweiz).

Glencore Xstrata was also advised by Swiss firm Pestalozzi.

Background to this deal:

Linklaters’ continued lead role for Glencore Xstrata was in the balance in the early stages of merger talks between the two mining companies (13 February 2012), but the deal’s gradual shift into a takeover by Glencore – and the dominance of Glencore in the new management – has placed Linklaters as the lead firm and put Freshfields’ ties to the group in question (13 May 2013).

Linklaters’ Jacobs and Freshfields corporate partner Julian Makin led for the respective clients on the merger (2 February 2012), while Freshfields partners Doug Smith and Piers Prichard Jones advised Xstrata on its $4.5bn Yankee bond issue in October 2012.

Jacobs led on Glencore’s 2010 bond issue alongside capital markets partner Keith Thomson (25 January 2010) and on its 2011 IPO (12 April 2011), with a Clifford Chance team including Cartwright, Lewis and Connolly advising the banks on the float. The bond saw Cleary Gottlieb Steen & Hamilton advised the arrangers.

Last year Clifford Chance partner Russell Wells also led for a syndicate of banks on $12.5bn of revolving credit facilities for Glencore International and Glencore Singapore and a separate group of lenders on a $3.1bn liquidity backstop facility for Glencore in connection with its merger with Xstrata.