This report is not a personal recommendation and does not take into account your personal circumstances or appetite for risk.
Glencore stock remains in recovery mode today, making a bullish breakout beyond 6-
month falling resistance at 100p. This comes from positive investor reaction to the miner being able to refinance a major loan facility early. An existing revolving credit facility (RCF) of $8.5bn is being replaced by a new $7.7bn facility which is good news, keeping the ball in the air as the miner aggressively reduces its cumbersome debt load, restructures and aims to rebound from the commodity sector depression.
Furthermore, details suggest a vote of confidence from the banking sector via larger commitment from its loan syndicate, which could imply more competition for GLEN’s business and thus lower financing costs. This has allowed the miner to almost double the number of banks in the syndicate for further refinancing in Q2 (even more competition, even lower interest rates?). At a time when the commodity sector is under close scrutiny in terms of its ability to weather the current storm, bounce back and be in a position to honour borrowings, all this suggests progress down in the GLEN.
Mike van Dulken, Head of Research
This research is produced by Accendo Markets Limited. Research produced and disseminated by Accendo Markets is classified as non-independent research, and is therefore a marketing communication. This investment research has not been prepared in accordance with legal requirements designed to promote its independence and it is not subject to the prohibition on dealing ahead of the dissemination of investment research. This research does not constitute a personal recommendation or offer to enter into a transaction or an investment, and is produced and distributed for information purposes only.
Accendo Markets considers opinions and information contained within the research to be valid when published, and gives no warranty as to the investments referred to in this material. The income from the investments referred to may go down as well as up, and investors may realise losses on investments. The past performance of a particular investment is not necessarily a guide to its future performance. Prepared by Michael van Dulken, Head of Research
Comments are closed.