10 May 2023 09:23

Metalloinvest pays coupon on Eurobonds to holders in Russia, agent refuses to transfer funds to foreign investors

MOSCOW. May 10 (Interfax) - Metalloinvest has paid the latest coupon on its dollar-denominated Eurobonds maturing in 2028 to bondholders whose rights are recorded with Russian depositories, but the payment did not reach other investors because the payment agent refused to process it, the Russian iron ore and steel producer reported.

Payment to bondholders whose rights are recorded with Russian depositories was made in Russian rubles at the official exchange rate published by the Central Bank of Russia, the company said. The latest coupon payment was due at the end of April.

"The paying agent - Deutsche Bank AG, London Branch notified the Company that it will not process the coupon payment to the relevant clearing systems for the remaining noteholders," Metalloinvest said.

"The Company will continue to explore other options to meet its obligations to noteholders under the current documentation," Metalloinvest said.

The company reported last September that it had received the consent of investors to make direct payments to local Eurobond holders and made the corresponding changes to documentation.

Last October, Metalloinvest placed local bonds totalling $285.8 million to replace 2028 Eurobonds held by investors whose rights are recorded with Russian depositories. The company replaced about 44% of the Eurobond issue, which initially totalled $650 million. The replaced bonds were cancelled.

At the time the company also split up payments on the Eurobonds that remained outstanding. Payments to bondholders whose rights are recorded with Russian depositories are made in rubles and Metalloinvest appointed a local payment agent, Gazprombank , to handle these payments.

The company continued to transfer payments to investors whose rights are recorded with foreign depositories to the payment agent abroad. According to data Metalloinvest reported last fall, these bondholders accounted for 44.3% of the initial issue amount, meaning a little less than $290 million.

Metalloinvest has been subject to U.S. blocking sanctions since April 12, 2023.