Metinvest launches tender for 2021, 2023 bonds

16 September 2020

Metinvest (METINV), Ukraine’s largest steelmaker, offered the holders of its METINV’21 and METINV’23 notes to purchase them with funds coming from the issuance of a new tranche, according to a tender announcement published by Metinvest on Sept. 15.


Metinvest is also asking the holders of its METINV’21 notes to consent to changes in its terms and conditions to allow Metinvest to redeem early all of these notes (USD 115.3 mln currently outstanding) at 100 percent of nominal, according to the announcement. The consent of 75% of METINV’21 noteholders is required for the terms to be changed, and Metinvest disclosed in its announcement that it has received from a holder of USD 80.8 mln of METINV’21 notes an indication of its intention to participate in the tender. Therefore, Metinvest needs the consent of USD 5.7 mln of METINV’21 noteholders for the terms to be changed, the holding disclosed in its announcement.


The purchase price is 100 percent of nominal for METINV’21 and 101.25 percent for METINV’23, and the expiration deadline for the offer is 11:59 p.m. New York City time on Oct. 13.


The holders of both METINV’21 and METINV’23 notes will receive an early tender payment of 3 percent of nominal if they meet the early tender and consent deadline of 5 p.m. (New York City time) on Sept. 28.


The holders of METINV’21 notes will receive the 3 percent of nominal even if they do not tender their notes for purchase, provided they submit their consent to the change in the notes’ terms by 5 p.m. (New York City time) on Sept. 28.


The closing bid quotes on Sept. 14 were 99.9 percent of nominal for METINV’21 and 102.7 percent for METINV’23.


Metinvest plans to spend no more than USD 290 mln on total payments to the holders of its notes in the current tender, according to the announcement.


In order to finance the purchase, Metinvest plans to issue new USD-denominated notes with a minimum amount of USD 300 mln and a maturity of seven years, according to a Sept. 15 Bloomberg report. Metinvest said in its announcement it plans to cover all its expenses in connection with this refinancing exercise, in addition to all its payments to noteholders, with the proceeds from the issuance of its new notes.


The purpose of the Offer is to proactively manage and extend the holding’s debt maturity profile, lower refinancing risks, and take advantage of favorable market conditions, Metinvest said in its announcement.


Metinvest gives no assurance that the deal will be completed, the announcement said. The deal’s completion is contingent upon Metinvest placing its new notes on satisfactory terms, as determined in Metinvest’s sole discretion.


Dmytro Khoroshun: It is possible that the METINV’23 note will be excluded from some of the JPMorgan CEMBI indices as a result of a successful tender because the amount outstanding of these notes will drop below USD 500 mln.


We expected Metinvest to refinance its METINV’23 note in 2H20 or in 1Q21 on the wave of strong steel and iron ore prices and we view this proactive move by the holding as positive.


We maintain our neutral view on METINV bonds.

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