Metinvest prepays USD 150 mln of PXF

Metinvest (METINV), Ukraine’s largest steel and iron
ore producer, has repaid USD 150 mln of its PXF loan facility ahead of
schedule, according to the company’s March 26 investor release.

Following this prepayment, the remainder due under the
PXF facility is USD 78 mln, the release said. At the end of 2020, the amount of
PXF due in 2021 was USD 133 mln, according to Metinvest’s FY20 results
presentation, with the remainder due in 2022.

The PXF prepayment reduces dependence on borrowed
capital and gives Metinvest a greater flexibility regarding debt portfolio
management, the release said, adding that with this prepayment Metinvest took
advantage of its strong financial results and robust liquidity position.

Recall, in early March Interfax-Ukraine reported that Metinvest was considering a new bond issuance
with a part of the proceedings possibly used for early repayments of its bank
loans.

Dmytro Khoroshun: Metinvest
might still issue a new bond despite this prepayment, we think, and do it as
soon as possible.

An early repayment of up to USD 0.3 bln of METINV’23
bond outstanding might be one of the reasons for a new issuance.

Metinvest might want not to delay its bond issuance
because the market appetite for Ukrainian risk might diminish with time during
its April-May issuance window. This is because by late May it might become
clear that the country might not receive the next tranche under its current
Stand-By Arrangement with the IMF.

We maintain our neutral view on METINV bonds.