Glencore expands bond buyback as manages debt

LONDON, Oct (HKSE: 3366-OL.HK - news) 18 (Reuters) - Miner Glencore has increased the size of a bond buyback tender to $1.49 billion from $1.25 billion, it said on Tuesday, seeking to seize on favourable conditions to reduce its debt burden.

Miners, which racked up high levels of debt last year after commodity prices crashed, are in a much stronger position, helped by a commodity rally and some asset sales.

Investors are also more willing to take out exposure to the sector, which has rallied strongly as its dollar-denominated earnings offer shelter from a weak pound and the chance of positive returns in an environment of ultra-low interest rates.

In a statement on Tuesday, Glencore (Frankfurt: 8GC.F - news) said the tender offer, which began on Oct. 3, would expire on Oct. 31 for nearly $1.5 billion in notes, up from a previously announced $1.25 billion.

Industry sources said the measure would reduce the amount of debt maturing each year.

In September this year, Glencore announced its first eurobond issue since the 2015 commodity price crash. It was heavily oversubscribed.

In general, industry sources say big miners, still cautious after last year's rout, were only likely to use the bond market to strengthen their balance sheets and eventually increase dividends. They are seen as unlikely to embark on aggressive expansion plans.

Glencore said in August it expected to exceed its target to cut debt, but it also took a nearly $400 million hit from a hedge on coal that has denied it the benefits of a very strong coal rally.

(Reporting by Barbara Lewis; Editing by Ruth Pitchford)