Kernel secures 3Y syndicate loan for USD 200 mln

Ukraine’s largest sunflower oil producer and grain
trader Kernel (KER PW, KERPW) reported on Oct. 18 it entered into a three-year
USD 200 mln revolving PXF facility with a syndicate of European banks. The
company intends to use the facility for financing working capital. The company
did not disclose the interest rate.

Dmytro Khoroshun: This is likely
a rollover of a one-year, USD 300 mln syndicate pre-export facility (PXF) that
the company renewed in August 2016. On top of a extension of the facility’s
tenor, it is also likely that the company secured a lower interest rate.

In early September 2017, TXF News reported Kernel was
working on improving both the PXF’s pricing (from 5.9pp to below 5.0pp over
LIBOR) and its tenor (extending it from one to three years). The reduction to
USD 200 mln from USD 300 mln suggests that Kernel might have indeed secured the
very best of what the banks were willing to offer. We remain bullish on Kernel
stock.

This news is positive not only for Kernel but also
for the general market of international loans to Ukrainian borrowers. One of
the next deals might be Ferrexpo’s long-awaited PXF, which was already being speculated on in late July.