Evraz and NLMK plan to refinance their bonds

Russian mining and metals companies try to take advantage of recovery in the prices for coal and steel: Evraz and NLMK have announced that they may early redeem bonds for $750 million and $1.17 billion respectively, issuing new securities. Investors have an interest in the industry, but the steelmakers will have to offer a high coupon on the new bonds to successfully refinance the debt.

Evraz of Roman Abramovich, Alexander Abramov and Alexander Frolov is willing to spend up to $750 million to buy back its Eurobond, including the papers of its subsidiary coal company Raspadskaya. These are the three issues of bonds of Luxembourg Evraz Group S.A. maturing in 2017-2018 (securities for $1.18 billion of the initial volume of $2.15 billion are in circulation), as well as the papers of Raspadskaya for $40.17 million (nominal value of the issue is $400 million) maturing in April 2017. This is refinancing, rather than debt repayment - Evraz plans to pay the buyback on account of funds from the new issue of bonds to extend the maturity of the debt, the company reports. The offer is valid until June 9, the settlement with the securities sellers will take place on June 17. Evraz doesn’t not disclose details of the new issue.