Metinvest pays an average 106% of accrued coupons in October

Ukraine’s largest steelmaking holding Metinvest (METINV) distributed an additional USD 9.77 mln in interest in October among its creditors, including USD 6.99 mln to bondholders, the company announced on Nov. 14.

Metinvest paid the regular 30% of interest accrued in October, or USD 2.78 mln, to bondholders, plus an additional amount on a cash sweep basis, according to the terms of the standstill agreement. October’s additional amount became possible after the average unrestricted cash amount on its balance sheet reached USD 190.1 mln, therefore exceeding the threshold of USD 180 mln.

Including the additional interest paid, Metinvest, on average, paid 105.6% of coupons on Eurobonds accrued for October. Recall in September, Metinvest repaid 98% of interest accrued on its Eurobonds. In January-July, it paid only the minimum amount of 30%.

The total coupon paid for the METINV’16 bond was USD 0.73 mln (95% accrued for the month), and the METINV’17 bond was USD 2.50 mln (94% of accrued for the month). For the METINV’18 bond, the payment was USD 6.54 mln, which exceeded the accrued amount for the month (USD 5.81 mln), thus enabling the holding to reduce the amount outstanding of the note by USD 0.52 mln.

Andriy Perederiy: The high cash payment of coupons is what we expected from Metinvest, given its solid October operating performance and beneficial steel pricing. We expect about the same level of cash coupon payments in November as well, given steel and iron ore prices remain at firm levels and the recent de-bottlenecking of the railway connection to Mariupol. We reiterate our positive view on Metinvest Eurobonds, anticipating that the completion of their successful long-term restructuring, expected in December, will become a price trigger.