PUMB extends deadline for Eurobonds purchase till June 20

First Ukrainian International Bank (PUMB, PUMBUZ) announced on June 15 it is postponing the deadline for its tender to purchase its Eurobonds to June 20. It also increased the minimum purchase price to 103% of par, keeping other tender conditions unchanged. Recall, the bank announced a tender to purchase about USD 40 mln in its outstanding Eurobonds on May 31, with the minimum purchase price set at 101.5% of par, with the deadline for submitting offers being June 13. The final purchase price will be determined based on “modified Dutch auction” rules after the bank receives offers from its bondholders.

PUMBUZ bonds, currently USD 118.5 mln outstanding, are repaid in equal quarterly installments (USD 19.76 mln) at the last day of each quarter until Dec. 31, 2018 and have a coupon rate of 11%. The bonds are currently traded on the secondary market at about 102% of par.

Alexander Paraschiy: At the current market price, PUMBUZ bonds yield 9.0% to their maturity, which is among the highest yields in Ukraine’s fixed income universe. The deadline’s extension suggests that few investors are ready to get rid of an instrument with such a return rate, in line with our expectations. We see some chance for the bank to buy back its bonds at about 104-105% of par, but we do not believe the amount of bonds to be offered will approach the expected amount of USD 40 mln.