Baar, Switzerland 6 October, 2015
Glencore funding factsheet
Introduction
Set out below is a summary of Glencore’s financing arrangements. This
largely consists of information already announced, mostly in the 2015 Half-Year Report released on 19th August 2015 of results for the six-month period ended 30th June 2015.
Available committed liquidity
 At 30 June 2015, available committed liquidity was $10.5 billion (p. 71 of 2015 Half-Year Report). As of today, committed available liquidity is materially above
June’s level, given
the recent $2.5 billion equity placement, the business generating positive free cashflow and the ongoing focus on delivery of the various other debt reduction measures, including lower net working capital. Further delivery of the debt reduction programme, including the $2 billion target for asset disposals, will similarly enhance liquidity levels.
Current credit rating
 Standard &
Poor’s
: BBB, negative outlook
 
Moody’s
: Baa2, negative outlook
Sources of funding
Glencore’s
 marketing and industrial businesses are funded via a mix of short/medium and long-term facilities. At 30 June 2015, these facilities comprise: Short/medium term funding:
 $15.25 billion committed syndicated revolving credit facilities; substantial portion undrawn, which, together with $3.1 billion of cash and cash equivalents and net of $1.3 billion of issued USCP, forms the basis of committed available liquidity at a point in time
 $1.2 billion drawn secured against inventory/receivables; availability is substantially higher, such that the vast majority of these Glencore facilities remain undrawn. These undrawn facilities are not included in the available liquidity definition, notwithstanding the asset-backed nature of this funding source
 $3.4 billion bilateral bank facilities Long-term funding:
 $31.1 billion capital market notes. Separately, $5.4 billion of notes mature within 1 year; in addition there is $0.9 billion of other non-current bank loans
Terms and conditions, related to committed, unsecured facilities
No financial covenants, no rating events of default or rating prepayment events, no material adverse change events of default or material adverse change prepayment events.
Secured vs. unsecured
 As noted above, only $1.2 billion (<2.5%) of the G
roup’s funding
was secured at 30 June 2015.
 
 
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Committed vs. uncommitted
 As noted above, only $4.6 billion ($1.2 billion secured and $3.4 billion bilateral lines) of the Group
s funded facilities were uncommitted at 30 June 2015.
Impact of a credit rating downgrade
Glencore is undertaking measures to strengthen its balance sheet, including a material debt reduction, that the company expects shall serve to protect and maintain a strong BBB/Baa credit rating. In the event of a downgrade
by Standard & Poor’s and/or Moody’s from current
 ratings to the level(s) immediately below, a
ratings’ grid in the
$6.8 billion 5-year revolving credit facility provides for a modest additional margin step-up. As this 5-year revolving credit facility is expected to remain fully undrawn, the net additional effect would only be 35% of this modest step-up margin, being the applicable commitment fee only. The maximum margin for sub-investment grade
rating from either Standard & Poor’s or Moody’s
 is 1.10%. There is no ratings grid in relation to the $8.45 billion revolving credit facility. In addition, there are $4.5 billion of bonds outstanding, where a 125bps margin step-up would apply, in the event that the bonds were rated sub-investment grade by either major ratings agency.
Details on various funding arrangements: $15.25 billion committed syndicated Revolving Credit Facility
(“RCF”)
 
 Signed on 28 May 2015, comprising 60 banks, including 34 Mandated Lead Arrangers
 The RCF is for general corporate purposes, comprising:
 a $8.45 billion 12-month RCF with a 12-month term-out option to May 2017
(Glencore’s option)
 and a 12-month extension option
(subject to Banks’ approval)
 
 a $6.8 billion 5-year RCF with two 12-month extension options subject to
Banks’
approval
 the overall amount drawn under the RCF was $6.6 billion at 30 June 2015
 there are no financial covenants in the RCF documentation
US Commercial Paper
(”USCP”)
 
Glencore
’s
stand-alone USCP rated A2/P2, respectively, by S&P
and Moody’s
 
 USCP is utilised from time to time
 The amount drawn was $1.3 billion as at 30 June 2015
 The notes mature not more than 397 days from the date of issue
 Any USCP issued is excluded from available committed liquidity calculation
Bilateral bank loans
Other bank loans (c.$3.4 billion drawn at 30 June 2021) comprises various uncommitted bilateral bank credit facilities and other financings. These bilateral bank facilities are individually smaller than other financings (<$100 million), and provided by an extensive group of banks to
various entities within Glencore’s global business t
o satisfy local business working capital /  jurisdictional requirements, operational flexibility etc. These drawings are unsecured and self-liquidating, meaning that as the underlying working capital / funding requirements reduce, so too, any drawn facilities are repaid with the associated working capital reduction proceeds. These facilities are typically rolled-over on an annual basis. Although c. $3.4 billion was drawn
 
 
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at 30 June 2015, availability is substantially higher, such that the vast majority of these Glencore facilities remain undrawn.
Notes and cross-guarantees
$36.5 billion notes outstanding at 30 June 2015, including $1.9 billion maturing in October 2015. See Appendix for full details.
 Notes are issued on a pari passu basis, applying a cross guarantee structure introduced at the time of the Xstrata acquisition
(see Moody’s and S&P reports dated 7 May 2021
and 19 June 2013, respectively).
 Glencore Group bonds (issued by Glencore Funding LLC, Glencore Finance (Europe)  AG and Glencore Australia Holdings Pty Ltd) have guarantees from Glencore plc, Glencore International AG and Glencore (Schweiz) AG (previously Xstrata (Schweiz)  AG).
 Following the Xstrata acquisition, legacy Xstrata bonds (issued by Xstrata Finance (Canada) Limited, Xstrata Canada Financial Corp, Xstrata Canada Corporation and Xstrata Finance (Dubai) Limited) also now have guarantees from Glencore plc and Glencore International AG, implemented by way of supplemental indentures.
 Similarly, the outstanding USD notes issued by Viterra Inc. in August 2010 have guarantees in place from Glencore plc and Glencore International AG.
Readily Marketable Inventories (
RMI
)
Represents those marketing inventories that are contractually sold or hedged. At June 30 2015, total inventories were $23.6 billion, of which Marketing RMI were $17.7 billion. For corporate leverage purposes Glencore accounts for RMI as being readily convertible to cash due to their very liquid nature, widely available markets and the fact that price exposure is covered by either a forward physical sale or hedge transaction.
Use of financial instruments
In its physical commodities marketing / logistics business, Glencore seeks to manage commodity price exposure through futures and options transactions on worldwide commodity exchanges or in over-the-counter markets, to the extent available. Such risk management financial instruments are continually marked-to-
market in Glencore’s financial statements, with
the related assets and liabilities included in other financial assets from and other financial liabilities to derivative counterparties, including clearing brokers and exchanges.
Glencore’s
 derivative transactions are undertaken within the industry standard frameworks (e.g. ISDA agreements), governing applicable collateral management and netting requirements / obligations. Glencore seeks to ensure that insignificant credit relationships / exposure apply to / within its hedging activities, such that, in addition to initial margining, and subject to low credit thresholds, these transactions are regularly and fully collateralised, via daily cash margining to / from Glencore. As at 30 June 2021 (p. 64-65 of the 2015 Half-Year Report), Glencore reported $3.8 billion of financial instrument assets ($2.2 billion commodity derivatives, $1.2 billion physical commodity forwards and $0.4 billion foreign exchange and interest rate contracts) and $5.3 billion of financial instrument liabilities ($2.1 billion commodity derivatives, $1.1 billion physical commodity forwards and $2.1 billion foreign exchange and interest rate contracts, the latter relating primarily to cross currency hedging of non-USD bonds).
Letter of Credit
(“LC”)
 
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