MMK.L Regulatory News (MMK)

MMK placed US$500 mm Eurobonds

14-06-2019, Magnitogorsk

Magnitogorsk Iron and Steel Works ("MMK"), one of the largest steel suppliers in Russia rated Baa2 (Moody's) / BBB (Fitch) / BBB- (S&P), returned to the international market after more than 15 years with a successful placement of 5-year US$500mm Eurobonds with an annual coupon rate of 4.375% payable semi-annually. The proceeds of the issue will be used for general corporate purposes.

The issue was oversubscribed by over 4.5 times with the total order book exceeding US$2.2 bn at the peak. The final book comprised a broad range of international investors, with 31%, 29% and 17% of allocations coming from US, Europe and UK, respectively, with the remaining portion attributable to other regions.

Citi, J.P. Morgan and Société Générale acted as the Joint Lead Managers and Joint Bookrunners for the new issue. The US$500,000,000 4.375% Guaranteed Notes due in June 2024 were issued by MMK International Capital DAC, an Irish company formed for the sole purpose of issuing debt instruments and financing loans to MMK.

Pavel Shilyaev, Chief Executive Officer of MMK commented: "We are very pleased with the successful placement of the company's Eurobonds. The 4.375% coupon is the lowest USD coupon on Russian/CIS Corporate issuance in almost 1.5 years and represents ~0 bps new issue premium to the implied Russian Metals & Mining yield curve of the same rating bucket. The issue was backed by a very high level of interest from fixed income investors globally and we believe that the bond has successfully and firmly re-established MMK's presence in the international bond market".

About MMK

MMK is one of the world's largest steel producers and leading Russian metals companies. The company's operations in Russia include a large steel-producing complex encompassing the entire production chain, from the preparation of iron ore to downstream processing of rolled steel. MMK turns out a broad range of steel products with a substantial share of high-value-added products. In 2018, the company produced 12.7 million tonnes of crude steel and 11.7 million tonnes of commercial steel products. MMK Group had sales in 2018 of US$ 8,214 million and EBITDA of US$ 2,418 million.

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