Fitch: MHP on positive watch

Fitch Ratings said it placed MHP SA's B- long-term foreign-currency issuer default rating on Rating Watch positive and upgraded the local-currency issuer default rating to B from B- upon the company's recent placement of a $500 million eurobond.

The outlook is stable.

The agency also said it assigned a final rating of MHP's eurobond and placed it on Rating Watch positive.

The positive watch reflects the scope for an upgrade following the increase in the amount of eurobond proceeds that will be used for repayment of debt due in 2017 to 2018, Fitch said, and the creation of a liquidity buffer.

Such refinancing may lead to growth in the hard-currency debt service ratio to levels justifying an foreign-currency issuer default rating upgrade one notch higher than Ukrainian country ceiling of B-, the agency explained.

The upgrade of the local-currency issuer default rating reflects an improvement in the company's liquidity after the recent eurobond placement, Fitch added.

The agency said it expects an improvement in MHP's liquidity and a reduction of refinancing risks once the net $240 million proceeds from the new seven-year eurobond are used to repay short-term debt and create a liquidity buffer.

The remaining $245 million will finance a tender for a respective portion of the $750 million eurobond due April 2020.

MHP's financial flexibility will be strengthened due to lower concentration of debt maturities and the extension of the debt maturity profile, Fitch added.

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