Ukraine-based mining group Metinvest has appointed Deutsche Bank (DB) as coordinating mandated lead arranger and bookrunner to launch into syndication a US$300mn structured pre-export finance facility.
The facility, which is priced at 550 basis points over Libor, has an overall tenor of three years with repayments due in 24 equal and consecutive monthly instalments once the 12-month grace period is completed.
Funds from the facility will be used for Metinvest’s working capital and capex, among other things.
An assignment of proceeds under steel export contracts by Metinvest with steel producers and exporters Azovstal Iron and Steel Works and Enakievo Metallurgical Works, both in the Ukraine, will secure the facility.
Furthermore, Metinvest has also recently issued US$500mn–worth of Eurobonds which will be used as a sign to potential investors of the group’s strength in the market, as well as providing Metinvest with an alternative form of financing.
While the process is still in its early phases, Boris Jaquet, distribution and EM loan trading at Deutsche Bank, tells GTR: “We have received a very high level of interest [in the syndication], with a lot of reverse enquiries, which is always a good sign.”
This is the first pre-export finance facility opened in the Ukraine in 2010, and the first successful completion of such a deal for Metinvest since it closed a massive US$1.5bn PXF in 2007, followed by a 2008 deal when the borrower made some provisional moves to mandate for a similar facility which fell off the radar as the financial crisis took hold.
Metinvest also celebrated a 600% rise in share price in 2009, after it become one of the biggest major Ukrainian companies to avoid restructuring any of its debts.
The deal comes after Ukrainian iron-ore producer Ferrexpo’s US$230mn PXF in 2009 which won a GTR Best Deal in Trade Finance award.
It is notable that the Ferrexpo deal was priced significantly higher than the Metinvest deal, at 700 basis points over Libor.
Last Updated May 28, 2010
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