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redeemed ​$97mn of its notes in August​ and ​$98.5mn in January​.​ ​Interpipe had about $85mn of cash​ around September 22, and therefore should be able to finance the redemption with its own funds.​ ​We see the following possible reasons for Interpipe’s redemption of its notes: the high interest cost, ​the owner’s hypothetical intention to sell the company​, and the scenario of the company ​refinancing the remainder of the notes​, possibly paying out dividends from the funds raised.
Metinvest​, Ukraine’s largest steelmaker, placed on September 17 a total of $333mn of new notes maturing on October 1, 2027 at 98.429% of par​, according to Bloomberg. The notes were priced at 7.95% yield to maturity, bear a 7.65% coupon, and were issued to finance Metinvest’s purchase of its 2021 and 2023 notes under ​tender offers announced on September 15​. Metinvest amended its tender offers for its 2021 and 2023 notes by increasing the maximum acceptance amount to $320mn from $290mn previously, according to the holding’s September 18 release to investors. Metinvest continues to intend to keep the amount outstanding of its 2023 notes above $300mn after the tender, the release said. Demonstrating the financial world’s hunger for yield, Metinvest’s Eurobond placement was almost five times oversubscribed, a banker told Interfax-Ukraine last night. Ukraine’s largest vertically integrated iron mining and steel company, seems to be getting more money cheaper than it expected. Initially looking for $300mn at 8.5%, Metinvest appears to be settling for $333mn worth of seven-year bonds for 7.95-8.05%. For comparison, 10-year US Treasuries carry a yield of .69%
Metinvest will redeem 2021 note in full, but 2023 note in part. ​Metinvest, Ukraine’s largest steelmaker, received under ​tender offers announced on September 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 September 29 release to investors. Metinvest will purchase $104.1mn of its 2021 notes on October 1, and the remaining $11.2mn on October 16. ​Meanwhile, the holders of $235.5mn of Metinvest’s 2023 notes tendered their notes for purchase by the September 28 early deadline. Metinvest will purchase the scaled amount of $193.3mn of its 2023 notes on October 1. The amount outstanding of Metinvest’s 2023 notes after the completion of the offers will be $311.2mn. ​Because the ​maximum acceptance amount of $320mn 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 October 13. ​Metinvest will finance the purchases of its 2021 and 2023 notes with the proceeds from the issuance of its ​$333mn 2027 note placed on September 17​. ​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 $115.3mn of its 2021 notes at par and will pay the holders of 92.48% of these notes a 3% fee, a total of $118.5mn, according to our calculations. This leaves $201.5mn (out of the maximum acceptance amount of $320mn) for the purchase of $193.3mn of the nominal amount of 2023 notes at 104.25%.
62​ UKRAINE Country Report​ October 2020 ​ ​www.intellinews.com