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Ukrainian mining and steel company Metinvest BV launched the sale of $750 million in seven-year bonds to yield 9%, according to a person familiar with the deal.
The issuance will be denominated in U.S. dollars, with semi-annual coupon payments. Price guidance came out earlier in the day in the range of 9% to 9.25%.
Moody’s Investors Service plans to rate the new notes B2 and Fitch expects to give them a single-B rating, each matching the issuer’s corporate ratings. Moody’s had upgraded the issuer’s senior unsecured tag on Jan. 21, citing solid cash flows even in light of its recent acquisition activity. Another upgrade is in store if Metinvest is able to improve its shorter-term liquidity, which may prove difficult given the company’s forthcoming acquisition and spending plans.
The company operates mining and production chains for steel, iron ore, and coal, and posted revenue of $6.8 billion for the nine months ended Sept. 30. In the same period, export sales to Southeast Asia, Europe, the Middle East, and North Africa accounted for about 64% of that revenue.
According to the offering memorandum, the company intends to use proceeds to fund its expenditure program, pay down existing debt, and for other general corporate purposes
