Metinvest decides to redeem USD 6.3 mln in PIK notes on Sept. 18

Ukraine’s leading steel holding Metinvest (METINV)
reported on Sept. 1 that it will allocate USD 20 mln in early repayment amount
on Sept. 18 to partially reduce its debt. In particular, the holding is going
to repay USD 6.32 mln in PIK notes on Sept. 18 (out of USD 26.46 mln
outstanding as of Aug. 18). To do that, Metinvest will also pay USD 6.71 mln in
PIYC interest for all its notes that will be accrued since its last coupon
payment on Aug. 18. The holding’s next scheduled coupon payment date is Nov. 18.

Andriy Perederey: This is in
line with our expectations that the holding will start repaying its PIK notes. However, we expected
they would do that in November, when regular payments are scheduled. Early
repayment of part of the PIK notes will allow the holding to save USD 0.1 mln
of interest costs this coupon period. These aren’t huge savings, so the move is
rather an expression of Metinvest’s intention to repay all its debt as soon as
possible. The move is supportive of our bullish view on Metinvest bonds.