Metinvest changes consent solicitation terms

Metinvest (METINV), Ukraine’s largest steel and iron
ore producer, changed some terms of its solicitation for noteholders’ consent
to amend certain terms and conditions that govern restricted payments, according
to an announcement distributed on Dec. 13.

First, the early consent deadline was extended to the
time of the respective noteholder meeting (start at 11am-noon, depending on the
tranche, London time on Dec. 15). Previously, the indicative early consent
deadline was 4pm London time on Dec. 7.

Second, the consent fee for the METINV’26 tranche was
increased to 1.10% of par from 0.95% of par previously.

Third, in respect of the METINV’26 tranche only,
Metinvest will pay (provided certain conditions are met, including that the
resolutions with respect to all tranches are passed) the revised consent fee
not only to the noteholders who vote for the respective resolution, but also to
noteholders who vote against it.

Recall, on Nov. 22 Metinvest launched the
consent solicitation asking the holders of all five of
its Eurobond tranches outstanding to amend certain terms and conditions that
govern restricted payments. Dividends and other distributions, certain
investments (including acquisitions of minority interests in other entities),
and the purchase or redemption of equity interests and subordinated
indebtedness comprise the restricted payments.

Dmytro Khoroshun: Metinvest
apparently had not secured by Dec. 7 what it needed and is trying to rectify
the situation with these changes.

Specifically, as of Dec. 7 Metinvest likely perceived
it lacked both the quorum for the METINV’26 noteholder meeting as well as
enough votes in favor of the resolution for some tranches, we think.

We maintain our neutral view on METINV bonds.