State-owned Ukreximbank (Kyiv) is considering a scenario to repurchase its eurobonds from the market with their replacement with cheaper and longer-term resources, chairman of the financial institution Yevhen Metsger has said.
“As one of the working scenarios, the repurchase of our eurobonds from the market is considered, the rate at which is about 10% in dollars, and replacing them with cheaper and longer-term resources from the International Monetary Fund, he said.
In addition, Metsger said that the bank is holding a dialogue on additional capitalization with the Finance Ministry as a representative of the owner and with the National Bank of Ukraine (NBU).
“Formally, the management will first discuss the situation and forecast of activities with the supervisory board, then ask it to apply for additional capitalization to the government. For the entire cycle, we assume that it will take us time until the end of the second quarter,” he said.
The chairman of the board of Ukreximbank said that the bank needs additional capital to enable it to develop.
He said that without additional capital, the bank will also not be able to provide the necessary support during a pandemic to a number of clients and key sectors of the economy.
“To rely on itself, make a profit, then invest it in net worth is a long way to go, given that the bank’s financial results for 2019 do not allow to reinvest profits in capital. Our former management declared over UAH 600 million of income. However, in reality, I am afraid that we will get a much more modest figure,” the banker said.
According to him, the bank now has quite negative dynamics in operating income, resulting in, there is no way to quickly accumulate financial results to cover one-time effects, and it will take time for the new management team to reproduce the working business model and reverse the trend.
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Ukraine has announced the issue of new 10 year eurobonds pegged to euros, the Finance Ministry has reported on its website.
“The new EUR-denominated Reg S/144A senior unsecured notes are offered with a bullet maturity of 10 years,” the ministry said on Wednesday.
FCA/ICMA stabilization applies, the ministry added.
In the middle of June 2019, Ukraine placed seven-year EUR 1 billion eurobonds at 6.75% per annum on the foreign loan market. This was the first sovereign issue of Ukrainian eurobonds in euros over the past 15 years. Demand for it exceeded supply six times.
The Finance Ministry previously announced plans to issue first 2020 eurobonds at the beginning of the year.
Kernel, one of the largest Ukrainian agricultural groups, has issued $300 million aggregate principal amount of 6.5% notes (eurobonds) due October 17, 2024.
Kernel said on the website of the Warsaw Stock Exchange (WSE), the issue price was 99.475%.
The notes are rated BB- by Fitch, and B by S&P, two notches above and in line with Ukrainian sovereign respectively.
In January 2017, Kernel placed eurobonds worth $500 million. The maturity date of Kernel’s debut eurobonds was January 31, 2022, and the coupon rate was set at 8.75% per annum.
Kernel is the world’s largest producer and exporter of sunflower oil, the leading producer and supplier of agricultural products from the Black Sea region to world markets.
Kernel, one of the largest Ukrainian agricultural groups, has placed $300 million eurobonds with a coupon rate of 6.5% and maturity in 2024, one of the market participants has told Interfax-Ukraine.
According to him, the pricing was set at 6.625%, the securities were sold at a price of 99.475% of the face value.
The organizers of the placement were ING Bank, JP Morgan.
The company did not comment on this information to the agency, saying that the details were planned to be released on October 17.
As reported, in January 2017 Kernel placed eurobonds worth $500 million. The maturity date of Kernel’s debut eurobonds was January 31, 2022, and the coupon rate was set at 8.75% per annum.
Kernel is the world’s largest producer and exporter of sunflower oil, the leading producer and supplier of agricultural products from the Black Sea region to world markets.
Metinvest mining and metallurgical group has placed 10-year $500 million eurobonds at 7.95% per annum and five year EUR 300 million eurobonds at 5.75% per annum, a source in banking circles has told Interfax-Ukraine.
The total demand for both tranches amounted to more than $1.1 billion in U.S. dollar equivalent.
The benchmark yield on bonds in U.S. dollars was 7.75-7.99% per annum, in euros – 5.75% per annum.
Metinvest held meetings with investors in the United States, the United Kingdom and continental Europe from September 18 through September 27.
Metinvest said on Tuesday that its offer of September 17 for a cash buyback on the amount of $440 million from $944.515 eurobonds due in 2023 with 7.75% coupon as part of the new bond issue was answered by holders of $639.391 million eurobonds.
According to the terms of the offer, other eurobond holders can still apply for redemption until October 15, inclusive, but they will no longer receive a 3% premium for early applications.
“The purpose of the offer is the proactive management of debt repayment, extending the maturity of the debt and reducing refinancing risks,” Metinvest said.
The buyback price for those who agree to sell before September 30 is 106% of the face value plus accrued interest. The results of the offer are to be summarized on around October 16 in order to carry out all settlements on October 17.
Metinvest Mining and Metallurgical Group, which on September 17 announced an offer to buy back $440 million eurobonds from the $944.515 million issue with maturity in 2023 and a 7.75% coupon and issue new bonds, has received bids for buyback from eurobond holders for $639.391 million. “The estimated scaling factor is approximately 71.265%,” Metinvest reported on the Irish Stock Exchange. According to the terms of the offer, other eurobond holders can still apply for redemption until October 15, inclusive, but they will no longer receive a 3% premium for early applications.
“The purpose of the offer is the proactive management of debt repayment, extending the maturity of the debt and reducing refinancing risks,” Metinvest said.
The buyback price for those who agree to sell before September 30 is 106% of the face value plus accrued interest.
The pricing of new eurobonds is preliminarily scheduled for October 1, the results of the offer are summarized on around October 16 in order to carry out all settlements on October 17.
A source in banking circles told Interfax-Ukraine that Metinvest had held meetings with investors in the United States, Great Britain and continental Europe from September 18 to September 27. The organizers are Deutsche Bank, Natixis and UniCredit. The company intends to place dollar-denominated eurobonds with a maturity of eight to ten years, and will also consider the possibility of a tranche in euros for five to seven years.
