MHP announces tender offer to buy its 2020 Eurobond

Ukraine’s leading poultry producer and farmer MHP
(MHPSA, MHPC LI) has offered to purchase all of its Eurobonds maturing in April
2020 (USD 495.6 mln outstanding), according the company’s March 9 announcement.
MHP is ready to buy out the bond at 109.5% of par from those offering them
before early tender deadline of March 21. It offers a price of 106.5% of par
for those meeting the expiration deadline of April 6. The price of MHP’s 2020
bond was 107.6% before the announcement and now is close to the early tender
price.

The tender offer is part of MHP’s refinancing approach
under which it will issue longer bonds. Therefore, the tender offer is subject
to “satisfactory” (determined by the company in its sole discretion) placement
of the new bonds by April 6. The offer is also subject to collecting offers for
at least half of the 2020 bonds outstanding as of the early tender deadline.

Andriy Perederey: MHP is the
only Ukrainian company whose Eurobonds trade inside the sovereign curve, so it
is likely that the company will be able to count on placement of the new notes
at a negative spread to sovereign. The company will likely try issuing 10-year
bonds at a rate between 7.0% and 7.5%. We remain bullish on MHP stock and
neutral on its Eurobonds.