Metinvest missed repayment of outstanding principal on its $114 million 10.25% notes, maturing on May 20, 2015. The company has issued no statement yet as to the ongoing consultations with its creditors. The non-payment is tantamount to default as the 2015 notes foresee no remedy period. The nonpayment also triggers cross-default, which is supposed by the provisions of its 2015, 2017, 2018 notes, as well as its PXF facilities.
Under the Noteholder Consent Solicitation from May 2, 2015, the company proposed to extend the maturity of the 2015 Eurobond to January 31, 2016. On April 10, 2015, Moody’s ratings downgraded the company’s probability of default rating to D-PD from Caa3-PD.
The development is highly negative for the company, as it is unveiling low prospects of Metinvest’s exit from a cascading default. The current default superimposed upon another ongoing one, which resulted from the failure of the company to make payment of $ 113 million on its PXF facility in March 2015. In the meantime, the company has to repay around $549 million of PXF by January 31, 2016. With regard to the company’s dire financial position and its high exposure to the Donbas conflict Metinvest is expected to launch a full-scale debt restructuring negotiations with its creditors, which may include a haircut request, besides a maturity extension. (https://empirestatecap.com/en/research/daily-commentator/235-ukraine-markets-daily-may-22,-2015.html/Ukrainian Metal)