Page 48 - UKRRptFeb20

8.5.1​ Fixed income - bond news
Ukraine’s Interpipe redeems $98.5mn of notes. ​Ukraine’s largest pipe and railway wheel producer​ I​ nterpipe​ redeemed at par $98.5mn of its 2024 notes on January 10, the company reported in a release the same day. After this early redemption, which was conducted at the option of the issuer, the amount outstanding of INTHOL’24 notes is $210.7mn, reports Concorde Capital in Kyiv. “The call (early partial redemption) risk of the remaining outstanding INTHOL’24 notes had substantially decreased as a result of this redemption, because Interpipe has less cash now and might prefer to preserve it as a cushion for less-profitable times ahead,” Dmytro Khoroshun of Concorde Capital said in a note. The redemption was possible due to the high profitability of Interpipe’s railway product segment, and Concorde expects the abnormally high profitability of this segment to subside in 2H20. “As a result of the redemption of the 10.25% notes, Interpipe will save $10.1mn in interest payments per year. In order to be able to redeem early its notes, Interpipe had to repay in full a LIBOR+6.65% senior banking facility, of, which $22.9mn should have been outstanding as of January 1,” Khoroshun added. Interpipe’s debt is now $210.69mn in 2024 notes ($150mn of, which must be repaid on December 31, 2023) and $22.5mn in a working capital bank loan, which must be repaid in 2020.
Ukrainian Railway pays its first coupon on 2024 bond.​ Railway operator Ukrzaliznytsia​ (Ukrainian Railway) paid its first $24mn coupon on its new Eurobond issued in July 2019, the company reported on January 11. The payment was made on time, demonstrating the company’s status as a reliable borrower, according to the report. Ukrainian Railway placed a five-year $500mn Eurobond at the rate of 8.25% in early July, and issued an additional $94.9mn in bonds to the EBRD in September. This year, Ukrainian Railway is scheduled to pay $59.9mn in coupon and amortization for 2021 bond in March and another instalment for $57.4mn in September, as well as a $24.5mn coupon for its 2024 bond in July. We see the company’s operating profit enabling smooth payments.
48​ UKRAINE Country Report​ February 2020 ​ ​www.intellinews.com