Polyus rakes out its Eurobonds

The company Said and Suleiman Kerimov will spend $ 300 million to buy back part of its debt: foreign investors fear US sanctions against its corporate debt.
The gold mining company Polyus announced the redemption of Eurobonds with redemption in 2020, 2022, 2023 and 2024. up to $ 300 million, including accrued interest income, the company said. Eurobonds are placed at the rate of 4.7%, 5.6%, 5.3% and 4.7% respectively. The yield is 6.11%.

Applications from investors will be accepted until September 21, the results will be known on September 24. Prices will be determined in accordance with the outcome of the modified Dutch auction. Now in circulation four issues of Polyus Eurobonds for $ 2.55 billion and ruble bonds worth 15 billion rubles.

A spokesman for Polyus declined to comment.

Polyus is the largest gold producer in Russia. In the first half of 2018, the company produced 1.66 million ounces. Cash flow from operating activities amounted to $ 637 million, EBITDA - $ 844 million, net debt for the second quarter of 2018 - $ 3.2 billion, its ratio to EBITDA - 1.8. As of the end of June, there were $ 908 million in cash and cash equivalents on the accounts. "Polyus" can afford to repurchase securities, says the director of the corporate ratings group ACRA Maxim Khudalov.

Seyca non-residents get rid of Russian debt securities: bonds are getting cheaper, and their profitability is growing, he says: "Now is a good time to buy them and pay off or, if the situation stabilizes, sell at a higher price."

The yield of Polyus' securities is one of the highest for its rating, says Raiffeisenbank analyst Denis Poryvai. But investors are afraid of making the company on the sanction list of the US Treasury, which does not allow foreign investors to buy them, he stresses.

"Polyus" - not the first Russian company, recently announced about the repayment of Eurobonds. This week, the plans to buy out Eurobonds of three issues for a total of up to $ 700 million were reported by RZD. "Industrial and Metallurgical Holding" plans to purchase securities of up to $ 100 million.