Ferrexpo reports positive 9M14 results and announces Eurobond restructuring

Ferrexpo reports positive 9M14 results and announces Eurobond restructuring



20 січня 2015 года
ICU

Yesterday, Ferrexpo (FXPO LN; US$2.52; Buy; TP US$4.48) offered to exchange its existing Eurobonds on a par for par basis for new notes maturing in April 2019 that carry a 10.375% coupon with 50% amortizing in April 2018. Holders will receive a 20% cash consideration if they agree to exchange their bonds before 2 February 2015. The minimum participation rate is US$300m, but it can be waived at the company's discretion. The final settlement should occur on 19 February 2015. Ferrexpo also announced its 9M14 results: revenues from sales declined 2.7% YoY to US$1.1bn, EBITDA increased 17% to US$404m, while net debt/LTM EBITDA declined from 1.5x as of end-9M13 to 1.3x as of end-9M14.

Investment implications: Investment implications: As Ukraine's deteriorating credit profile and the weak world market for iron ore prevent the company from issuing new Eurobonds, the restructuring of Ferrexpo's 2016s would allow the company to redistribute its debt repayments more evenly through 2015-2019. The appetite for investors to assume the relative risks remains to be seen. Despite the abrupt fall in world iron prices, the company displayed resilience as its EBITDA remained mostly flat before factoring in the positive impact of the hryvnia's devaluation. We see this as a positive development.

Источник: ICU

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