MHP new 7-year Eurobonds priced at 7.75%

Ukraine’s leading poultry and farmer MHP (MHPSA, MHPC LI) has priced its USD 500 mln in Eurobonds due May 2024 at 7.75%, the company announced on April 28. MHP said it expects them to gain a B- rating by Fitch and B by S&P. The company will use the proceeds to finance a tender for up to USD 350 mln of its USD 750 mln in Eurobonds maturing in 2020, as well as for short-term debt refinancing and diversification of the company’s poultry and grain businesses.

Igor Zholonkivskyi: The rate of 7.75% is lower than the price of Ukraine sovereign Eurobonds maturing in 2024, currently trading at 8.12%-8.21% of par. Just as with Kernel’s Eurobonds maturing in 2022 (now trading at 7.0%-7.2% of par), the markets perceived MHP’s Eurobonds as a less risky investment than Ukraine sovereign notes of equal maturity. The new Eurobonds will allow the company to decrease its average cost of debt and improve its debt maturity profile.