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Fitch rates MHP eurobond B
Fitch Ratings said it assigned an expected B rating to MHP SA's new planned five-year guaranteed eurobond with an expected recovery rating of RR4.
The company has a long-term foreign-currency issuer default rating of B with a stable outlook.
This rating is capped by Ukraine's country ceiling of B. MHP's long-term local-currency issuer default rating is B+.
Fitch also rates its 99.9% subsidiary OJSC Myronivsky Hliboproduct's long-term foreign-currency and local-currency issuer default ratings at B and B+, respectively, along with a national long-term rating of AA+(ukr).
The new issue is planned to total $300 million to $350 million, plus the amount of new notes to finance the tender offer for up to 60% of the existing $585 million senior notes due 2015. This will help phase out the group's debt maturities, the agency said.
In addition, the excess cash proceeds will be used to repay short-term debt, fund selective land bank expansion and boost cash liquidity, Fitch said.
The new notes will rank as senior unsecured obligations and benefit from upstream guarantees from seven operating subsidiaries, the agency said.
The terms of the new notes are substantially the same as the terms of the existing notes with a key exception being that the debt incurrence covenant is based on a net debt-to-EBITDA of less than 3x against 2.5x for the existing bonds, Fitch added.
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