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Ukraine's Metinvest offers to swap out $500 million 10¼% notes
By Susanna Moon
Chicago, Oct. 21 – Metinvest BV said it began an exchange offer for its $500 million 10¼% guaranteed notes due May 20, 2015.
In exchange for the 10¼% notes, the company is offering to issue up to $400 million of 10½% guaranteed notes due Nov. 24, 2017, according to a company press release. The issue price is par.
The exchange value is 80%, the cash amount is $200 per $1,000 principal amount, and the early instruction fee is $10 per $1,000 principal amount of notes tendered by 5 p.m. ET on Oct. 31, the early deadline.
The exchange offer will end at 11:59 p.m. ET on Nov. 18, with settlement set for Nov. 24.
The offer is conditioned on the receipt of tenders for at least $450 million of the 10¼% notes.
The issuer is seeking to reduce its debt service obligations due in 2015 and achieve a more efficient maturity profile, which would allow it to maintain its operations through the current crisis in Ukraine, while offering the holders the possibility to receive a higher coupon while extending the maturity of a portion of their note holdings and converting the remaining portion of their holdings into cash at par value, according to the press release.
The company is specifically making the exchange offer at this time in order to boost the amount of free cash available in 2015 as well as to preserve working capital to maintain production levels and the minimum level of investment needed to sustain its business, the release noted.
Deutsche Bank AG, London Branch (+44 20 7545 8011, attn: liability management group) and ING Bank NV, London Branch (+44 20 7767 5107, attn: syndicate desk) are the dealer managers.
The Bank of New York Mellon, London Branch (+44 1202 689644, attn: debt restructuring services, email to debtrestructuring@bnymellon.com) is the exchange agent.
Metinvest is an integrated mining and steel business based in Donetsk, Ukraine.
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