Ukrzaliznytsia may issue of up to USD 1.5 bln in Eurobonds in two years
13 September 2017
Yevhen Kravtsov, the acting head of Ukraine railway
monopoly Ukrzaliznytsia (RAILUA), said he believes that tapping international
debt market is one of the ways of improving the company’s
economic efficiency, according to Interfax-Ukraine report of Sept. 12. Over the
next 1.5-2 years, the company is planning to issue new Eurobonds for USD
1.0-1.5 bln, Kravtsov said. Such an issue will enable the company to refinance
some of the company’s expensive loans, he said.
Alexander Paraschiy: Out of the company’s total debt of USD 1.4 bln as of end-1Q17, USD 0.5
bln were dollar-denominated loans from local banks with a weighted average
interest rate of 11.6%, and UAH 0.5 bln were Eurobonds with a coupon rate of
9.88%. That indeed looks too expensive, given that the company’s Eurobond
trades at a YTM of about 8% these days. Therefore, we see it possible for the
company to tap the Eurobond market to lower its average cost of debt,
especially if Ukraine’s sovereign Eurobond will be successfully placed this
month. We maintain our neutral view on RAILUA bond.
bln were dollar-denominated loans from local banks with a weighted average
interest rate of 11.6%, and UAH 0.5 bln were Eurobonds with a coupon rate of
9.88%. That indeed looks too expensive, given that the company’s Eurobond
trades at a YTM of about 8% these days. Therefore, we see it possible for the
company to tap the Eurobond market to lower its average cost of debt,
especially if Ukraine’s sovereign Eurobond will be successfully placed this
month. We maintain our neutral view on RAILUA bond.
