Polyus has planned to spend funds from the placement of new eurobonds to refinance, the company’s senior vice-president of finance and strategy Mikhail Stiskin said during the conference call.
As it was previously reported, Polyus Gold International Limited - the parent company of Polyus and the traditional issuer of the group’s eurobonds – will starts road show of dollar eurobonds on Friday. The organizers are assigned Gazprombank, Sberbank CIB, Alfa Capital, VTB Capital, Renaissance Capital and JP Morgan. The amount and price of the issue will be determined on the results of road show, M.Stiskin noted.
In October 2016, PGIL already issued eurobonds for $500 million and spent the proceeds to repay bank loans of the group, which should be paid in 2017-2019. Taking into account the refinancing of another $210 million through bank loans, the forecasted amount that should be repaid in 2017 is only $32 million, in 2018 - $21 million, the principal payments will start from 2019.
The refinancing, M.Stiskin noted during the conference call, concerns not the maturity, but the debt portfolio structure.
It was reported that Polyus decided to increase the share of loans with a fixed rate in the loan portfolio. As of end of the fourth quarter of 2016, the share of the company’s liabilities with fixed rate already made up 46% of the total loans compared to 3% at the end of the third quarter.
On the other hand, according to the Polyus’ documents, the share of one of the creditors - Sberbank – is currently exactly half of the company's loans (20% more are other banks’ credit lines, 5% are ruble- and 25% - eurobonds). The credit line to the amount of $2.5 billion for a period of 7 years was opened by Sberbank to Polyus a year ago. Sources of the Interfax reported that the rate on the loan was LIBOR plus 4% per annum. The funds were used including for buyback.
Now there are two issues of the PGIL’s eurobonds in circulation: for $750 million with a rate of 5.625% and maturing in 2020 and for $500 million with a rate of 4.699% and maturing in 2022. As of end of 2016, the net debt of Polyus made up $3.241 billion, PGIL - $3.08 billion.