14 Sep 2017 17:04

NLMK to buy back $317 mln in 2018, 2019 notes as result of offer

MOSCOW. Sept 14 (Interfax) - NLMK will buy a total of $317.38 million in Eurobonds maturing in 2018 and 2019 as the result of an offer to bondholders, the steel maker said.

NLMK will buy $252.014 million in 2018 and $65.371 million in 2019 notes for more than their face value.

NLMK has said it would pay a premium of $17.5 and $53.75 per bond, face value $1,000, from the respective issues. On this basis, NLMK will pay $325.3 million on the bonds in total.

Bonds worth $289.9 million will remain outstanding, including $144.145 million in 2018 bonds and $145.738 million in 2019 bonds.

NLMK is simultaneously offering new medium-term USD notes, for which book building began on September 14. A road show for these Eurobonds was held from September 6-8 in London, Zurich, New York and Boston. The placement organizers are JP Morgan, Societe Generale, ING and UniCredit.

Yield guidance for the seven-year notes is 4%-4.l25%, with pricing expected later in the day.

NLMK President Oleg Bagrin told journalists previously that the company had no acute need for new borrowing, but it was interested in refinancing existing debt via a buyback and placement of new Eurobonds.

It has already conducted such transactions, placing $700 million in seven-year Eurobonds at 4.5% per annum in June 2016. That placement was oversubscribed more than fivefold. NLMK simultaneously retired $571 million in Eurobonds maturing in 2018 and 2019, the same issues that are targeted in the current buyback. The company is ready to buy back the remainder of the issues in a new offer.

Net debt totaled $1.045 billion as of the end of Q2 2017 and the net debt/EBITDA ratio was 0.43x.

NLMK's principal owner is Vladimir Lisin, whose 85.54% stake is held by Fletcher Group Holdings. Depositary receipts on the company's shares (ten receipts represent one share) are traded on the London Stock Exchange.