MHP prices 8Y bond at 6.95%, receives early offers from 83% of 2020 bondholders

Ukraine’s leading poultry producer and farmer MHP
(MHPSA, MHPC LI) has priced its new USD 550 mln Eurobond maturing in April 2026
at a 6.95% coupon rate, according to the company’s March 23 announcement. MHP
expects them to gain a B rating from Fitch and S&P. The company will use
the proceeds to finance a tendered buyout of its 2020 bond for short-term debt
refinancing and for general corporate purposes.

MHP also reported that the holders of USD 409.8 mln –
out of the total USD 495.6 mln in Eurobonds maturing in 2020 – agreed to sell
them (at 109.5% of par) by an early tender deadline of March 21. Its minimum
participation requirement of 50% was satisfied with 82.7% of the 2020
outstanding bonds tendered. Other bondholders have until April 6 to tender
their 2020 notes at 106.5% of par.

Andriy Perederey: It looks
like both requirements for MHP to tender its 2020 Eurobonds – minimum
participation and the issue of a new bond – have been satisfied, so the company
will purchase the earlier tendered bonds by April 6. The placement rate of new
bonds is below the sovereign yield curve, as we expected  (we anticipated
the 10-year bond in the range of 7.0% and 7.5%). It is also the historically
lowest rate for a private Ukrainian Eurobond.

We remain bullish on MHP stock and neutral on its
Eurobonds.