MHP to buy out USD 410 mln in early tendered 2020 notes

Ukraine’s leading poultry producer and farmer MHP
(MHPSA, MHPC LI) announced on April 3 that it has satisfied its latest
condition for completing its partial buyback of 2020 notes. The company,
therefore, will purchase 409.8 mln of the 2020 notes (out of 495.6 mln
outstanding) at the early tender price of 109.5% of par. The payment date for
such notes is April 6. Also, by April 6, the remaining 2020 noteholders will
have the chance to offer their bonds at the price of 106.5% of par. 

MHP also confirmed that day it raised USD 550 mln from
the issue of eight-year Eurobonds at a coupon rate of 6.95%. Recall, MHP
announced on March 9 a tender offer for its 2020 notes, satisfying their
financing condition (issue of a new Eurobond) and minimum participation
condition (at least 50% of 2020 bondholders tendering their notes).

Alexander Paraschiy: It is unlikely that someone will use this opportunity to sell their
2020 notes to MHP at 106.5%, so the total amount of the notes outstanding will
likely be USD 85.8 mln. If so, MHP will spend USD 448.7 mln for the purchase of
the early tendered notes, which means its net proceeds from the new Eurobond
placement will be USD 101.3 mln (before costs and fees related to the debt
operation). The company’s new Eurobonds trade very close to their par value,
and our view on them is neutral, as well as on the company’s 2020 and 2024
notes.