Metinvest to pay USD 6.5 mln in Eurobond interest on March 18

Ukraine’s leading steel holding Metinvest (METINV)
reported on March 12 that it will allocate USD 9.8 mln for an early payment on
March 18, of which the only disbursement to the noteholders would be the USD
6.5 mln of Pay-If-You-Can (PIYC) interest for the period of Feb. 18 – March 17.

The Eurobond principal amount outstanding will remain
the same as on Feb. 18, USD 1,187.1 mln. The record date for the payment is
March 16.

Dmytro Khoroshun: Metinvest made
similar PIYC-only early payments in December
and January. Paying the PIYC interest on
a monthly basis possibly allows the holding to use the one-month LIBOR rate
instead of the higher three-month LIBOR rate for settlements with PXF
creditors. In any case, we think that whether or not Metinvest makes such
monthly payments makes little difference for the noteholders.

We maintain our Speculative Buy recommendation on
the Metinvest Eurobond on expectations of a deal (restructuring or refinancing)
in the near future. For more details, please refer to our March 1 report on
Metinvest.