Russia's Evraz gets needed consents to drop leverage ratio covenant

By Susanna Moon

Chicago, Dec. 10 - Evraz Group SA said it received the needed consents at a meeting held on Monday to remove a leverage ratio covenant under its $750 million of 8¼% guaranteed notes due 2015, which are guaranteed by Mastercroft Ltd.

Holders representing 85.16% of the notes participated in the consent solicitation, with 88.09% of those voting in favor of the proposal, according to a company press release. The consent solicitation and meeting were announced on Nov. 14.

As noted before, the company held a meeting on Dec. 10 to ask noteholders to remove the covenant that requires maintaining a net leverage ratio at or below a specified level. There is $576.7 million principal amount of the notes remaining.

The company also obtained the needed consents to strike the definitions of "consolidated net indebtedness" and "net leverage ratio."

As a result, all of the outstanding series of notes issued by the issuer now contain market standard incurrence based limitation on debt covenants.

As the measure has passed, holders who voted for it by the early deadline will receive $4.50 per $1,000 principal amount of notes and thosed who vote for it by the late deadline will receive $2.50 per $1,000 of notes.

The early instruction deadline was on Dec. 5, and the late instruction deadline was on Dec. 7.

J.P. Morgan Securities plc (+44 20 7134 3414, emea_lm@jpmorgan.com, attn.: liability management group) and Deutsche Bank AG, London Branch (+44 20 7545 8011, liability.management@db.com, attn.: liability management group) are the solicitation agents, and Bank of New York Mellon, London Branch (debtrestructuring@bnymellon.com for general enquiries relating to the meeting or ct_reorg_unit_inquiries@bnymellon.com for those regarding DTC instructions) is the tabulation agent.

The issuer previously said it was not in breach of any of the covenants and was seeking amendments to the covenant package to align the covenants with those of other series of notes. None of the other note series contain a covenant that requires the issuer to maintain a specific net leverage ratio, a previous press release noted.

Evraz is a Moscow-based steel producer.

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