Metinvest to redeem 2021 note in full, 2023 note in part

Metinvest (METINV), Ukraine’s largest steelmaker,
received under tender offers announced on Sept. 15
the consent from the holders of 92.48% (compared to 75% required) of its 2021
notes for the redemption of these notes in full early, the company announced in
a Sept. 29 release to investors. Metinvest will purchase USD 104.1 mln of its
2021 notes on Oct. 1, and the remaining USD 11.2 mln on Oct. 16.

Meanwhile, the holders of USD 235.5 mln of Metinvest’s
2023 notes tendered their notes for purchase by the Sept. 28 early deadline.
Metinvest will purchase the scaled amount of USD 193.3 mln of its 2023 notes on
Oct. 1. The amount outstanding of Metinvest’s 2023 notes after the completion
of the offers will be USD 311.2 mln.

Because the maximum acceptance amount of USD 320
mln has been exceeded by the amount tendered by the early
deadline, Metinvest will not accept any new notes for purchase, even though the
expiration deadline for its tender offers is Oct. 13.

Metinvest will finance the purchases of its 2021 and
2023 notes with the proceeds from the issuance of its USD 333 mln 2027 note placed on Sept. 17.

Dmytro Khoroshun: Metinvest
is successfully concluding its liability management move, with the coupon rate
on the new 2027 note, 7.65%, being slightly lower than the 7.75% Metinvest pays
on its 2023 note.

Metinvest will purchase the entire USD 115.3 mln of
its 2021 notes at par and will pay the holders of 92.48% of these notes a 3%
fee, a total of USD 118.5 mln, according to our calculations. This leaves USD
201.5 mln (out of the maximum acceptance amount of USD 320 mln) for the
purchase of USD 193.3 mln of the nominal amount of 2023 notes at 104.25%.

We maintain our neutral view on METINV bonds.