Metinvest to finalize restructuring and refinancing today

Metinvest (METINV), Ukraine’s largest steelmaker,
announced on Apr. 20 that the holders of 90% (USD 1,070 mln out of USD 1,187
mln outstanding) of its METINV’21 Eurobond tendered their notes for purchase by
the final deadline, Apr. 19, within the terms of the restructuring and
refinancing deal proposed by Metinvest on March 19.
The company reported that it decided to accept the entire amount for purchase because
all the conditions of its offer had been satisfied.

The deal will be finalized today, Apr. 23, which will
include amending the terms of the METINV’21 Eurobond, as well as settling the
issuance of the METINV’23 and METINV’26 Eurobonds and the purchase of the
METINV’21 Eurobond, Metinvest said.

Dmytro Khoroshun: The amount
of the METINV’21 Eurobond outstanding after the deal will be USD 117 mln, and
this note will be much less liquid than the newly issued Eurobonds. Namely, the
amounts outstanding are USD 944.5 mln for METINV’23, comprising USD 825 mln issued on Apr. 4 plus USD 120
mln issued afterwards (likely to PXF creditors) and USD 647.7 mln for METINV’26
(USD 525 mln issued on Apr. 4 plus USD 123 mln afterwards), according to
Bloomberg.

Recall, as a result of the amendments to the terms and
conditions of the METINV’21 Eurobond it will become a bullet-redemption note
with semi-annual coupon of 7.5% p.a.

We view the deal as an outstanding success for
Metinvest because the holding managed not to overpay for the METINV’21 Eurobond
(the price of 105.25% is at the very low end of our 104.9-109.1% range for the
fair value) and to place its new Eurobonds at low spreads to Ukraine’s
sovereign curve (120-150 bps).