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"Maybe it doesn’t mean what I think it means but I can hardly imagine the BOD would come out with a statement about looking at refinancing the Bonds without knowing their ability to do so"
Drice,
I did not see this. When did POG release this statement?
Drice,
You may well be right. After all, the bondholders would hardly lose out by redeeming early and being paid all the interest due to Nov 2022. The legal offer document will override an RNS, and POG are often careless / vague with their announcements.
RNS 14 Nov 2017.
"The Notes of US$500 million are due for repayment on 14 November 2022, as a consequence no principal payments are to be made prior to that maturity date. However Petropavlovsk 2016 Limited, the Issuer, may redeem all, but not part, of the Notes at par plus accrued and unpaid interest at any time on or after 14 August 2022, by giving not more than 60 nor fewer than 30 days' irrevocable notice to the Noteholders."
However, I think the debate is immaterial. Why would POG borrow $500m at 4% to pay back a loan they must pay 8.125% interest on up to Nov 2022?
They would effectively then be paying 12.125% interest on the loan for the next 29 Months.
This would only make sense if POG only paid the interest up till their announced termination date, not until Nov 2022.
I'm rather busy at the moment, but I will look at the paragraphs you have highlighted when I get a chance, but like you, I am not a lawyer.
Kenj. I think we will just have to agree to disagree on POG’s ability to redeem the 2022 Bonds early. I am not a lawyer and looking through hundreds of pages of legalese documentation is not something I relish. However, there is the following clause in the documentation:
6.4 Optional Redemption at Make Whole and Maturity Par Call
6.4.1 At any time, upon not less than 30 nor more than 60 days’ notice, the Issuer may redeem all, but not part, of the Notes at a redemption price equal to 100 per cent. of the principal amount thereof plus the Applicable Redemption Premium and accrued and unpaid interest to (but excluding) the redemption date specified in such notice.
“Applicable Redemption Premium” means the sum of the present values of the principal
amount outstanding of the Notes to be redeemed and the aggregate amount of scheduled
payment(s) of interest on such Notes for the remaining term of such Notes determined on the
basis of the rate of interest applicable to such Notes from and including the date on which such
Notes are to be redeemed (exclusive of interest accrued to the date of redemption), ….
Maybe it doesn’t mean what I think it means but I can hardly imagine the BOD would come out with a statement about looking at refinancing the Bonds without knowing their ability to do so