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AVELLUM Advises on Largest Refinancing for Metinvest

May 2018

AVELLUM Advises on Largest Refinancing for Metinvest

AVELLUM acted as the Ukrainian legal counsel to Metinvest Group (“Metinvest”) on the successful refinancing of its USD2,271 million debt consisting of USD1,592 million issue of new eurobonds (“new eurobonds”) and the amendment and restatement of its pre-export finance (“PXF”) facility allowing to secure USD765 million in the PXF facility.

The new eurobonds issue included USD944.5 million 5-year and USD647.7 million 8-year tranches. It was coupled with the cash tender offer and consent solicitation in respect of existing USD1.2 billion bonds due in 2021 (“existing eurobonds”) of which USD117 million remain outstanding following the tender offer.  The PXF facility was amended and restated to, among others, (i) extend its maturity to 2022, (ii) release certain common security under the existing bonds and the PXF Facility, and (iii) enable the lenders to shift to the new eurobonds.

The successful completion of the refinancing resulted in (i) the decrease Metinvest’s total funding costs, (ii) longer-term capital structure, and (iii) lower refinancing risks by untying the existing eurobonds and the PXF Facility. The new eurobonds issue is the Metinvest’s largest to date, with the lowest ever coupon and longest maturity. It is also the most sizeable eurobond issue by a privately-owned Ukrainian corporate.

AVELLUM’S senior partner Glib Bondar commented: “This is a remarkable deal that we are very proud of. The result speaks for itself. It was a privilege for us to play along with great professionals from Metinvest team, all financial and legal advisors, who seamlessly worked to get the deal over the finish line. This refinancing had both Eurobond and PXF angles which contributed to the complexity and was a good opportunity to demonstrate our versatile corporate finance expertise.”

Metinvest Group is a vertically integrated group of steel and mining companies that manages every link of the value chain, from mining and processing iron ore and coal to making and selling semi-finished and finished steel products. It comprises steel and mining production facilities located in Ukraine, Europe and the US, as well as a sales network covering all key global markets.

The AVELLUM team was led by senior partner Glib Bondar with support from counsel Taras Dmukhovskyy, senior associate Anna Melnychuk, associates Tetiana Mykhailenko, Orest Franchuk, Anastasiya Voronova, Oleg Krainskyi, Anna Mykhalova, and tax support from counsel Vadim Medvedev, associates Vladyslav Aleksandrov and Ihor Monastyrskyi.

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