Ferrexpo raises USD 195 mln in new debt

Ukraine’s largest iron ore pellet exporter Ferrexpo
(FXPOLN, FXPO LN) attracted a new three-year credit facility of USD 195 mln
with final repayment on 2020, the company announced in a Nov. 17 statement. The
credit facility “will be used for general corporate purposes,” the company
said. Also, CFO Chris Mawe pointed out that “the facility will significantly
reduce the group’s average cost of funding and extend its debt maturity
profile.”

Andriy Perederey: Ferrexpo
has had strong debt metrics (net debt-to-LTM EBITDA was 0.96x at the end
of1H17), which creates the ability to raise new debt facilities. The new credit
line is positive for the company’s debt sustainability, as it needs to repay
about USD 87 mln in 2H17 and USD 253 mln in 1H18 (including USD 173 mln in Eurobond
amortization in April).

We expect the company’s total debt at the end of 2017
will be about USD 682 mln, or a 7.1% yoy decrease. But we retain our neutral
view on Ferrexpo bonds, seeing both upside and downside risks to their price
being balanced.