Avangard places USD 200 mln Eurobonds

LSE-listed Avangard placed USD 200 mln, 5Y, 10% s.a. coupon Eurobonds at 10.5% on Friday. Mykyta Mykhaylychenko: This constituted a 150 bps YTM premium over MHP’15 Notes. Most of the proceeds will be used to refinance some part of Avangard’s short-term debt (total USD 187 mln as of end-1H10). The rest, together with USD 208 mln in money raised via an IPO in April, are to be used for CapEx, which will increase Avangard’s production capacity by 32% by 2011. Avangard is the largest industrial producer of shell eggs in Ukraine (23% market share), with total sales of USD 352 mln and EBITDA of USD 137 mln (EBITDA margin of 39%) in 2010F. The company’s gross debt will amount to as much as USD 320 mln, while Net Debt to ~USD 220 mln in 2010F, implying Net debt to EBITDA of 1.6x. The notes are now traded at 10.9%.