First Reserve to sell $800 million holding of Glencore 5% convertible bonds due 2014

By Rebecca Melvin

New York, Sept. 7 - Energy-focused private equity firm First Reserve Corp. has launched an offering of its $800 million of Glencore Finance (Europe) SA 5% convertible bonds due 2014, with final terms expected to be set on Thursday, according to a news release.

The Regulation S deal is being sold via Credit Suisse Securities (Europe) Ltd. and Morgan Stanley & Co. International plc, which are acting as joint lead managers and joint bookrunners.

The convertibles will be priced versus a Glencore reference price of $6.78, or £4.25, which represents a 4.7% premium over the closing price of Glencore shares on the London Stock Exchange Wednesday.

Based in Baar, Switzerland, Glencore is a supplier of commodities and raw materials to industrial consumers.

The Glencore-issued convertibles are guaranteed by Glencore International AG and Glencore AG.

First Reserve plans to use the proceeds from the bond offering to acquire ordinary shares of Glencore International plc, in part from potential investors in the bond offering.

Settlement of the bonds and the shares is set for Sept. 13.

First Reserve is a private equity investment firm focused on energy and natural resource industries with U.S. headquarters in Greenwich, Conn.

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