Page 61 - UKRRptSept21

The amount outstanding of METINV’26 notes is currently $648mn. On August 6, these notes were quoted at 113.3/114.2 percent of par, according to Bloomberg.
The indicative expiration time for the invitation is 4pm London time on August 18, with the company having options to extend it or terminate it early, according to Metinvest’s announcement. The indicative results announcement date for the tender is expected to be August 19. The indicative settlement date is on or about August 20.
Recall, in June Metinvest purchased $116mn of its METINV’23 notes via a similar tender. The maximum invitation amount was $150mn, and the purchase price was 107.3% of par (plus accrued interest), the same as the minimum purchase price announced at the tender’s launch.
“Investors might decide to unload their METINV’26 bonds at this tender for several reasons. First, there are risks that Ukraine’s missteps will delay the next IMF tranche beyond the earliest possible date of late November. Second, during the next several months the high-yield bond markets might experience repricing and capital outflow if the US Federal Reserve moves toward eventual tightening of its monetary policy. Third, the iron ore prices in China have plunged since mid-July, and we expect the steel prices to eventually drop further from their recent maximums. The 114% of par might be a reasonable exit price point for METINV’26 notes for investors betting on such outcomes, even though it is below the June maximum of 114.7% of par. Nevertheless, should Ukraine reach an agreement with the IMF against a backdrop of stable high iron ore and steel prices as well as easy monetary policy in the US and worldwide, it is possible that METINV’26 prices will rise above 114% of par in the next few quarters,” an analyst at the Kyiv-based Concorde Capital brokerage said in a research note.
61 UKRAINE Country Report September 2021 www.intellinews.com