Ferrexpo aims to refinance its debt

22 November 2016

According to Interfax-Ukraine, shareholders of Poltava Mining provided their approval for new bonds issue by parent Ferrexpo Plc. Amount of issue is to be not higher than USD 750M, tenor up to 10 years, coupon rate not higher than 11%.

This announcement means that management of Ferrexpo considers refinancing of its debt portfolio, which at the moment is close to USD 700M by more long-term facility, and to solve potential liquidity problems which can arise in case of fall in iron ore and pellets prices.

Current schedule implies repayment of close to USD 200M in Y2017 and more than USD 300M in Y2018. If under base case assumptions we see Ferrexpo to be able to keep to the schedule in Y2017, in Y2018 situation can be more complicated. Management of the company can try to use current favorable market situation (iron ore price are close to highest level for the last two years) for new bonds placement before decline in iron ore price, which is forecast by main part of market analysts.

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