Metinvest repays EUR 108 mln credit line

A subsidiary of Metinvest (METINV) repaid the remaining EUR 107.5 mln of a total EUR 410 mln credit line secured in January 2008, the holding reported on Dec. 19. The repayment was initiated in line with Metinvest’s strategy to concentrate all debt at the level of holding company. The debt was repaid from the subsidiary’s cash. The removed covenants related to the credit line will allow the holding to pursue its capital expenditures program, according to the release.

Roman Topolyuk: The redemption of the remaining outstanding loan issued at the subsidiary level (2.5% of Metinvest’s total debt, as of June 2012) follows the securing of a USD 300 mln credit line at the holding company level in early December. Our understanding is the repaid loan had some stricter covenants that might have limited Metinvest’s flexibility. If the USD 300 mln secured facility remains undrawn, the redemption improves the total debt-to-EBITDA ratio to 1.55x from 1.60x, we estimate (with a Eurobonds covenant of 3x).