Page 87 - RPTRusFeb17

to $1.9bn in 2016 as a result of lower sales volumes and a decline in prices, which was partially offset by lower input operating costs, the steelmaker said.
The bonds of Russia's troubled bank Peresvet, controlled by the Orthodox Church, sank after the publication of conditions of the bail-in scheme proposed by the central bank, RBC daily reported on February 21. The market value of Peresvet bonds on MICEX dropped to 18-30% to nominal value, with some of the issues trading at only 13-15% of nominal value and yields soaring to 300-800% annually. On February 20, the bank published the conditions of the restructuring of nine issues of bonds of around RUB29.6bn (€489mn), proposing a prolongation of the maturities to 2034-2036, with a 0.51% annual coupon and compensation of 0.25-0.51% of nominal, depending on the issue. Some of the issues in question mature in 2017, while previously the bank defaulted on eight bond issues. At the same time, RBC reminds that conditions of the bail-in recently proposed to the main creditors of the bank are substantially more attractive than those proposed to the bondholders, with about 10-15% of the funding to be compensated in cash, the rest converted into 15-year bonds yielding 0.51% annually. The Moscow Patriarchy controls 36.5% of the bank, another 13.2% is held by the Church-controlled fund Sodeystvie, 24.4% by the Russian Chamber of Trade and Commerce, with smaller stakes controlled by private individuals, including 12.4% by the bank's head Alexander Shvetsov. On October 21, the CBR took over Peresvet's operations by appointing a temporary administration and halting any transfers to creditors.
Russian steelmaker Evraz is planning to hold a roadshow of US dollar-denominated Eurobonds on March 6, Prime reported on March 2 citing unnamed banking sources. Evraz recently posted solid 2016 IFRS numbers , while also cutting the leverage from 4.9x to 3.1x net debt/Ebitda. The company's management said that debt repayment remained a priority over dividends and capex, which analysts welcomed. "We think Evraz will likely seek to benefit from the recent tightening of the company's credit spread on the eurobond market by extending its debt maturity profile via the printing of a new issue," Gazprombank commented on March 2. Now Evraz reportedly plans meetings in Moscow, London, US and Europe organised by Citi, Deutsche Bank, J.P. Morgan, and local VTB Capital and Gazprombank. The steelmaker also announced a buy-out offer worth $952.5mn on March 2 for two Eurobonds issues maturing 2018 and 2020, to finance which the new Eurobond issue is likely planned. Upon the publication of the 2016 results Standard & Poor's revised the outlook on Evraz's 'BB-' rating from Negative to Stable due to the strong cash flow and resilient operating performance. S&P expects further improvement in Evraz's credit metrics in 2017 with continued deleveraging efforts and an overall stronger pricing environment. "The outlook revision reflects Evraz's resilient operating performance and cash flow generation in 2016, despite the challenging market conditions in Russia, the main steel market for Evraz and where the group's major assets are located," the agency said.
87 RUSSIA Country Report February 2017 www.intellinews.com