Metinvest 2027 note included in JPMorgan indices

Ukraine’s largest steelmaker Metinvest (METINV)
reported on Nov. 4 that its 2027 note was included in two of JPMorgan’s corporate
emerging markets bond index (CEMBI) series, CEMBI Broad and CEMBI Broad
Diversified.

As a result, all of Metinvest’s USD-denominated
Eurobonds (due in 2023, 2026, 2027, 2029) are now included in these two
indices, according to the holding’s release for investors.

Metinvest’s 2029 note has replaced its 2023 note in
two other, narrower JPMorgan indices, CEMBI and CEMBI Diversified, the same
release said. The replacement followed the decrease in the size of the
holding’s 2023 note to below USD 500 mln.

In June 2018, Metinvest announced that its 2026 note
was included in CEMBI, CEMBI Diversified, CEMBI Broad, CEMBI Broad Diversified,
as well as CEMBI High Yield indices.

Recall, Metinvest announced in December 2019 that its
2029 note, issued in October 2019, had been included in JPMorgan’s
CEMBI Broad and CEMBI Broad Diversified indices.

Dmytro Khoroshun: These moves
by JPMorgan were likely expected by the markets.

Metinvest now has three note tranches with sizes below
benchmark: USD 311 mln in 2023 notes, EUR 300 mln in 2025 notes, and USD 333
mln in 2027 notes. We think that one of the advantages of having such smaller
tranches outstanding is that Metinvest might be able to borrow via tap
issuances. That is, the holding might approach the markets with a proposal to
increase the sizes of some of these tranches, up to around USD/EUR 500 mln, and
still maintain a manageable maturity profile.

We maintain our neutral view on METINV bonds.