Glencore , the secretive Swiss commodities trader, took a step toward a public listing valuing it at more than $35 billion, as investors bought bonds that could give them a near 6 percent stake.

The $2.2 billion deal raises the prospect of the sometimes controversial firm adapting its prized employee-owned model, accepting greater public scrutiny in return for access to the deeper pool of capital offered by a stock market listing.

Any eventual public listing could yield big windfalls for key leaders as 66 managers owned 46.4 percent of the share capital in 2008, according to a bond prospectus filed in July. It would also play into a warming global market for listings as investors recover their appetite for risk.

Led by Chief Executive Ivan Glasenberg and Chairman Willy Strothotte, also chair of sister company Xstrata , the firm is one of the world's largest producers and traders of commodities and raw materials.

Capping months of rumors, Glencore said on Wednesday it had sold convertible bonds to a group of investors, including energy-focused private equity firm First Reserve.

Other buyers include Singaporean sovereign wealth fund GIC, U.S. fund manager BlackRock and Zijin Mining Group <601899.SS> <2899.HK>, China's largest listed gold company.

This transaction, in which Glencore is opening up its equity capital to outside investors, marks an important milestone as we embark on the next stage of our corporate development, the Baar-based company said in a statement.

Glencore prides itself on a tight-knit culture, refusing to hire senior staff from outside, and says giving staff big stakes helps keep it profitable, prudent and long-term in focus.

It was founded by Marc Rich, the one-time fugitive pardoned by U.S. President Bill Clinton in 2001, but he sold out to management.

WAKE-UP CALL

Henri Alexaline, senior credit analyst at BNP Paribas, said: The credit crisis was a wake-up call that reminded the group of some structural weaknesses of being a private company.

However, he said while the deal was a milestone, any IPO remained a long shot that could take years.

An IPO is not simply about opening your capital structure, but it's also a shift in your business model, the way you reward yourself, how you communicate with the world, and who you're responsible to eventually, he said.

The thought process is underway but I don't think it's come to full maturity yet within the company.

The bonds mature in 2014 and pay a 5 percent coupon. But investors can choose to convert them to shares if Glencore stages a qualifying IPO or in certain other circumstances.

Glencore said the bonds value Glencore's equity, before their conversion, at $35 billion -- meaning if all $2.2 billion were converted, the investors would own 5.9 percent of the enlarged $37.2 billion equity base.

However, a person familiar with the matter said the terms were negotiated earlier in the year, and a subsequent run-up in equity and commodity markets meant any listing could place a substantially higher value on Glencore, yielding big windfalls for the investors.

Alexaline at BNP Paribas said Glencore was probably worth more than $40 billion and the investors had struck a good deal, getting a coupon little different from that on a normal bond.

GAUGING VALUATIONS

Glencore has no direct rivals but investors will look at companies such as smaller Asian commodities trader Noble Group or global miners such as Rio Tinto to gauge valuations. Shares in Noble have risen more than 30 percent in the last three months.

Glencore's last quarterly results, seen by Reuters, show the firm had earnings before interest, tax, depreciation and amortization (EBITDA) of $1.097 billion in the three months to the end of September, up 30 percent from the previous three months.

But EBITDA is down more than half for the nine months to end-September, hit by a halving in commodities prices versus 2008, the results show.

Neil Beddall, a credit analyst at Barclays Capital, said the proceeds would likely serve partly to buy back the Prodeco coal operations in Colombia that Glencore sold to Xstrata earlier this year.

Glencore, which sold Prodeco to raise funds to subscribe to Xstrata's rights issue, has an option to buy the business back for $2.25 billion, plus any cash invested by Xstrata and profit made in the meantime.

Glencore holds major stakes in public companies including Xstrata, Katanga Mining and Century Aluminum Co , and in IPO candidate UC RUSAL.

Citigroup and Morgan Stanley advised Glencore.

(Additional reporting by Rebekah Curtis; editing by Dan Lalor, David Cowell and Karen Foster)

China Energy Investment BNP Paribas