Metinvest pays 98% of accrued coupons in September
10 October 2016
Ukraine’s largest steelmaking holding Metinvest (METINV) distributed an additional USD 8.89 mln in interest in September among its creditors, including USD 6.28 mln to bondholders, the company announced on Oct. 7.
Metinvest paid the regular 30% of interest accrued in September, or USD 2.78 mln, to bondholders, plus an additional amount on a cash sweep basis, according to the terms of the standstill agreement. September’s additional amount became possible after the average unrestricted cash amount on its balance sheet reached USD 188.89 mln, therefore exceeding the threshold of USD 180 mln.
Including the additional interest paid, Metinvest, on average, paid 98% of coupons on Eurobonds accrued for September. Recall in August, Metinvest repaid 67% of interest accrued on its Eurobonds, and in January-July paid only the minimum amount of 30%.
The unpaid coupons for September amounted to USD 0.19 mln, which increased the holding’s total amount of bonds outstanding by 0.02% to USD 1,192.46 mln.
The total coupon paid for the METINV’16 bond was USD 0.67 mln (88% accrued for the month), and the METINV’17 bond was USD 2.30 mln (86% of accrued for the month). For the METINV’18 bond, the payment was USD 6.09 mln, which exceeded the accrued amount for the month (USD 5.81 mln), thus enabling the holding to decrease the amount outstanding of the note by USD 0.27 mln.
Alexander Paraschiy: The increased ability to repay accrued coupons is what we earlier expected. Starting in April, Metinvest has been replenishing its working capital, and its strong operating cash flow (USD 486 mln in operating cash flow before working capital for April-July) was absorbed by investments into working capital (USD 410 mln). September’s repayment of coupons confirms that the working capital accumulation process has come to an end. We expect about the same level of coupon payments in October as well, given steel and iron ore prices remain at firm levels. We reiterate our positive view on Metinvest Eurobonds, anticipating that a successful long-term restructuring of the bonds, expected in November, will become a price trigger.
