Metinvest amends terms and conditions of its notes

Metinvest (METINV), Ukraine’s largest steel and iron
ore producer, on Jan. 13 executed supplemental trust deeds to amend terms and
conditions of its notes, according to the holding’s announcement on the same
day.

 

The execution happened after the holders of METINV’26
and METINV’27 notes approved the amendments at their Jan. 13 meetings.

 

Recall,  Metinvest had previously achieved the consent of the holders
of its three other note tranches (METINV’23, METINV’25, METINV’29) for the
amendments.

 

Metinvest will pay the consent fee to relevant
noteholders on or before Jan. 20.

 

Regarding the amendments approved by the noteholders,
Metinvest is now not limited in its restricted payments if its net leverage
ratio (pro forma following the payments) is below 1x, and is limited to paying
out the aggregate of 100% of its consolidated net income (CNI) accrued since
the beginning of 2017 if its net leverage ratio is between 1x and 2.25x. If its
net leverage ratio is between 2.25x and 3x, Metinvest is limited to paying out
the aggregate of 50% of its CNI accrued since the beginning of 2017.

 

Previously, Metinvest was unable to make any
restricted payments if their aggregate exceeds 50% of its CNI accrued since the
beginning of 2017 without any reference to its leverage.

 

Restricted payments include dividends and other
distributions, certain investments (including acquisitions of minority
interests in other entities), and the purchase or redemption of equity interests
and subordinated indebtedness, the announcement said.

 

Dmytro Khoroshun: The
amendments enhance Metinvest’s ability to manage its capital structure and
execute long-term investment strategies, which is positive.

 

We maintain our neutral view on METINV bonds.