Glencore PLC on March 20 launched an offering of US$500 million nondilutive cash-settled convertible bonds due 2025, guaranteed by Glencore, Glencore International AG and Glencore (Schweiz) AG.

Concurrent to the placing, the company will purchase cash-settled call options on its shares to hedge any exposure to the potential exercise of conversion rights included in the bonds.

Each bond will have a nominal value of US$200,000 and will not bear interest. The bonds will be issued at 93.25% to 98.25% of their nominal value and will be redeemed at par March 27, 2025.

The initial conversion price will be 25% above the share reference price, which will be determined as the average of the daily volume-weighted average prices of Glencore shares on the London Stock Exchange on the 10 consecutive trading days starting March 21.

Glencore will use the net proceeds for general corporate purposes and to purchase the call options.

Earlier in the day, Glencore announced an agreement to acquire Rio Tinto's 82% stake in the Hail Creek coal mine and its 71.2% stake in the Valeria coal project, both in Queensland, Australia, for US$1.7 billion in cash.