Interpipe redeems USD 98.5 mln of notes

13 January 2020

Ukraine’s largest pipe and railway wheel producer Interpipe (INTHOL) redeemed at par USD 98.5 mln of its 2024 notes on Jan. 10, the company reported in a release the same day. After this early redemption, which was conducted at the option of the issuer, the amount outstanding of INTHOL’24 notes is USD 210.7 mln.

 

Dmytro Khoroshun: The call (early partial redemption) risk of the remaining outstanding INTHOL’24 notes had substantially decreased as a result of this redemption, because Interpipe has less cash now and might prefer to preserve it as a cushion for less-profitable times ahead.

 

The redemption was possible due to the high profitability of Interpipe’s railway product segment, and we expect the abnormally high profitability of this segment to subside in 2H20.

 

As a result of the redemption of the 10.25% notes, Interpipe will save USD 10.1 mln in interest payments per year. In order to be able to redeem early its notes, Interpipe had to repay in full a LIBOR+6.65% senior banking facility, of which USD 22.9 mln should have been outstanding as of Jan. 1.

 

Interpipe’s debt is now comprised of USD 210.69 mln in 2024 notes (USD 150 mln of which must be repaid on Dec. 31, 2023) and USD 22.5 mln in a working capital bank loan, which must be repaid in 2020.

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