Metinvest gets approval for 2015 bond restructuring

The holders of the 2015 notes of Metinvest (METINV), Ukraine’s largest steel producer, supported a restructuring offer from management during a bondholders meeting on June 26. The holding’s offer to repay USD 28.4 mln and to defer redemption of the remaining USD 85.3 mln until Jan. 31, 2016, was duly approved, according to its June 26 statement. The approval activated the waiving of a cross-default provision on the holders of Metinvest’s 2017 and 2018 notes, which was conditional upon the decision of the 2015 bondholders.

Roman Topolyuk: Metinvest’s stalemate with the holders of its 2015 bonds was resolved positively, which eliminates the risks of restructuring the holding’s 2017 and 2018 notes and is supportive of our choice of the 2017 notes as one of our top picks. Now the focus shifts towards reaching a similar standstill agreement with banking lenders, to which the company already defaulted on repayment of USD 178 mln in early May and may fail to repay another USD 400 mln by January 2016. Although it’s still a long way to go before a new amortization schedule is developed and approved for Metinvest, the risk of a moratorium being imposed on debt repayment – which was possible if the holders of the 2015 notes hadn’t supported the company’s offer – is out of the question now.