20 Oct 2009 19:18

Mechel places entire bond issue; first coupon at 12.5%

MOSCOW. Oct 20 (Interfax) - Mechel coal and steel group sold the entire fifth issue of bonds totaling 5 billion rubles in an open placement on October 20 with the first coupon rate set at 12.5%, the company said in a statement.

The company closed the bid book on the bonds last Friday. Demand exceeded the issue volume by 300%. The guidance for the first coupon was ultimately reduced to 12.5%-13.5% annually. The guidance had originally been 16%-17% but was lowered to 14.5%-15.5% late last week.

Gazprombank, Sberbank Russia and VTB Capital are the issue organizers.

The company has announced a three-year offer on the bonds, which will circulate for nine years. The bonds pay quarterly coupons.

Mechel has consolidated controlling shares in coal and steel companies and a number of ports. It has assets in Russia, Romania and Lithuania. Igor Zyuzin, the chief executive, is the group's main beneficiary. The free float is around 25%.