Page 86 - RusRPTApr19

Russia's 78th largest in terms of assets.
Russian Railways will start a roadshow for Eurobond placement on March 28, RIA Novosti reported on March 26 citing unnamed financial industry sources. Reportedly the railroad monopoly plans to place six-to-seven year bonds in the placement organised by Sberbank CIB, VTB Capital, and JP Morgan.
Russian industrial major that could follow with a Eurobond placement is metals and mining company Evraz, which is placing five-year Eurobonds denominated in US dollars at about 5.5%, RIA Novosti said on March 26 citing banking sources. Reportedly the demand for Evraz’ placement exceeds $2.4bn, with the yield cut from the initial 5.625-5.75% annually. The company had a roadshow on March 20-25.
Troubled O1 Group of Russian billionaire Boris Mints has persuaded the holders of its $350mn bonds to hold off the mandatory buyout offer, one of the largest owners of Moscow real estate said on the Irish Stock Exchange. Since spring 2018 O1 Group defaulted on three out of five bond issues worth a total of RUB87bn ($1.37bn) and finally had a 61.2% stake in О1 Properties acquired by Cyprus-registered Riverstretch Trading & Investments (RT&I), reportedly affiliated with state-controlled Rosneft oil giant. Reports also claimed that Financial Corporation Otkritie could get 35% stake in O1 Properties. The bond issues of O1 carry a change-of-control clause and the change of ownership (with RT&I and Otkritie) gives the right to its creditors to call for immediate repayment of most of company's debt. However, for the additional premium of 3% to nominal value, the bondholders agreed to postpone the repayment, the representative of O1 told Vedomosti daily, without disclosing how much the company would spend on calming the investors down. Reportedly 87% of the bondholders agreed to new conditions. Mints was one of the shareholders in Promsvyazbank (PSB), one of the largest private banks bailed out by the Central Bank of Russia (CBR) in 2017, and his businesses is suffering from banking assets contagion, risking losing over RUB20bn in assets after the CBR takeover of PSB and Financial Corporation Otkritie last autumn.
DME Limited, the owner of Moscow’s Domodedovo airport, has suggested that holders of its 2021 and 2023 Eurobonds consider extending the net debt to EBITDA ratio limit to 4.1x from the current over 3.1x until November 11, 2021, it said in a statement on March 4. DME Limited’s net debt to EBITDA ratio grew due to ruble volatility. Net debt grew significantly in nominal terms in 2018 although the debt declined in real terms. The company wants to issue ruble-denominated bonds to reduce the impact of the volatility and balance its long-term debt structure. The funds raised from the bonds are to be used to repay the debt in foreign currency, but may also be used for general corporate purposes. The offer envisages a premium of US $7.5 per bond for early approval before March 15 and $2.5 per bond for approval before March 25. A meeting with the holders is scheduled for March 27.
DME Airport of Moscow airport Domodedovo asked the holders of its two five-year Eurobond issues worth $650mn to revise the covenants and increase the maximum allowed net debt leverage ratios to 4x of Ebitda from 3x, the company said on the Irish Stock Exchange on March 4. "We expect the amendment’s approval and subsequent placement of new Rub-denominated bonds, coupled with negative FCF, may lead to further net leverage growth –
86 RUSSIA Country Report April 2019 www.intellinews.com