Severstal planning $450 mln in convertible bonds
MOSCOW. Sept 19 (Interfax) - Severstal is planning to sell $450 million on convertible bonds to 2017, the steel major said in a statement.
Pricing is expected today and placement on September 24
The bonds are convertible into Global Depositary Receipts (GDRs) listed on the London Stock Exchange, each representing one ordinary share of Severstal. They will be issued by Holdgrove Limited and will be guaranteed by Severstal.
The net proceeds from the Offering will be used by companies within the Severstal group primarily for the refinancing of their existing indebtedness and for general corporate purposes.
The bonds are expected to carry a coupon of 1.00 per cent per annum payable semi-annually in arrears, and to have a yield to maturity of between 2.00 and 2.50 per cent per annum. The conversion price is expected to be set at a premium of between 40 and 45 per cent to the reference price (being the higher of the volume weighted average price of a GDR between launch and pricing or $12.85), as determined at the time of pricing. The conversion price of the Bonds will be subject to standard convertible market anti-dilution adjustments.
Bondholders will have the right to convert their bonds into GDRs of Severstal at any point from 41 days after the issue date up to the close of business on the seventh dealing day prior to the final maturity date.
Severstal will make an application for the Bonds to be listed on the PSM segment of the London Stock Exchange some time after settlement of the Offering.
Citigroup Global Markets Limited and Deutsche Bank AG, London Branch are acting as Joint Bookrunners and Joint Lead Managers in connection with the Offering.
The placement volume is subject to an additional increase option of $50 million.
Directors at Severstal in June gave the green light to plans to offer up to 50 billion rubles in four series of three-year commercial papers in the form of exchange bonds and 30 billion rubles in three series of ten-year bonds, the steel company said in a statement.
Exchange bonds series Bo-06 and Bo-07 will each be 15 billion rubles in volume and Bo-08 and Bo-09 will each be 10 billion rubles.
The 2nd-series of ordinary bonds will be 15 billion rubles, 3rd series - 10 billion rubles and 4th series - 5 billion rubles.
Severstal has Bo-01 worth 15 billion rubles, Bo-02 - 10 billion rubles and Bo-04 - 5 billion rubles outstanding. It has registered but not yet placed Bo-03 - 10 billion rubles and Bo-05 - 5 billion rubles.