Metinvest offers a revised solicitation to Eurobond holders

Обзор облигаций 12.05.2015 Last Thursday, Metinvest issued new consent solicitations to the holders of the company's 2015, 2017 and 2018 Eurobonds after the previous solicitation was nullified when the prior vote assembly failed to reach quorum. As before, Metinvest proposes the bondholders the waiver of certain cross-default terms and the extension of 2015's maturity from 20 May 2015 to January 2016. The respective bondholder meeting will take place on 1 June with a required 75% quorum. According to the new offer, upon bondholders' consent, Metinvest will pay 25% of 2015's nominal value on 20 June 2015 and 75% on 31 January 2016 (versus 10% and 90%, respectively, in the previous offer). The company will also pay a 50bps consent fee to 2015's holders and a 25bps consent fee to 2017's and 2018's holders. In addition, Metinvest has offered to pay out 2015's in full or partially, should the company's payments on its pre-export facility (PXF) loan exceed US$28.4. The company also will pay a 25bps consideration to the holders of 2017's and 2018's, should its payments on PXF and 2015s exceed US$106.8m before 31 January 2016. Investment implications: We believe that with its new offer on cash down payments, Metinvest agreed to the demands of a certain bondholder group which renounced the previous terms offered. Given the consent of this group and the required quorum threshold, the likelihood of Metinvest's success in moving through the first stage of this debt restructuring increases significantly. The whole restructuring process, however, does not promise to go easily due to apparently different views of the company's creditors and to the uncertainty of the operational environment caused by the military conflict in Eastern Ukraine.