Metinvest pays average 182% of accrued coupons in December

Ukraine’s largest steel holding Metinvest (METINV) distributed USD 16.766 mln in interest to bondholders in December, the company announced on Jan. 17. Metinvest paid the regular 30% of interest accrued in December, or USD 2.764 mln, plus an additional amount on a cash sweep basis, according to the terms of the standstill agreement. December’s additional amount became possible after the average unrestricted cash amount on its balance sheet reached USD 201 mln, therefore exceeding the threshold of USD 180 mln.

Including the additional interest paid, Metinvest paid an average of 182% of coupons on Eurobonds accrued in December. Recall in November, Metinvest paid 151% of interest accrued on its Eurobonds. In January-July, it paid only the minimum amount of 30%.

The total coupon paid for the METINV’16 bond was USD 1.25 mln (164% of accrued for the month), while the METINV’17 bond was USD 4.31 mln (161% of accrued for the month). And the METINV’18 bond was USD 11.18 mln (193%). That enabled the holding to reduce the amount outstanding of the METINV’16 note by USD 0.492 mln, the METINV’17 note by USD 1.65 mln and the METINV’18 note by USD 5.41 mln.

Andriy Perederiy: Metinvest’s high coupon cash payments were driven by stable operating performance and beneficial steel prices in December. Also, the holding wants to fully execute a debt restructuring and it needs bondholder approval. The high cash payments can encourage this approval. We reiterate our positive view on Metinvest Eurobonds, anticipating that the completion of their long-term restructuring, expected in February, will become a price trigger.