Banks and bondholders are at loggerheads over Metinvest‘s debt restructuring, with talks becoming increasingly tense as lenders fight to have loan debt recognized as senior to Eurobonds, lenders involved in the negotiations said.
Bondholders and bankers are in general agreement to push out maturities and impose a debt standstill.
“Metinvest is not in bad shape but it has zero possibility of refinancing its debt”, a loan banker said. “The plan on the table is a standstill until next January and maturities pushed out until 2017”.
A Metinvest spokesperson said that the firm is looking to a find a compromise between the banks and the holders of the issuer’s $113.65 million 10.25% due on May 20, 2015.
“At this stage they (creditors) are not upset, but the company is trying to find a balance”, the spokesperson added. “The more you pay the banks, the less there will be for the bondholders”.
Bondholders are pushing for the company to pay down 10% of the principal owed to them, arguing that the banks have already had 10% of their debt paid this year through the natural amortization of their loans.
“The banks do not think this is fair. Their debt is more senior to the bondholders so any available money the company has should go to them”, the banker said.
The situation has been further complicated by small group of bondholders that are pushing to be paid in full on May 20 when the 2015 bonds are due to mature.
Metinvest wants to extend the maturity until January 31, 2016.
The group has a number of outstanding secured pre-export loans including a $300 million, five-year deal signed in November 2013, a $560 million, three-year deal signed in April 2013, and $1.2 billion, five-year loan signed in November 2011.
Banks on the deals include Deutsche Bank, ING Bank, Natixis, Portigon, Unicredit, Erste, BNP Paribas, Bank of Tokyo-Mitsubishi UFJ, Raiffeisen Bank International, Rabobank and Credit Suisse. (https://www.reuters.com/article/2015/05/05/metinvest-loans-idUSL4N0XW3AT20150505/Ukrainian metal)
