11:52 09.07.2021

Demand for five-year eurobonds of Ukrzaliznytsia for $300 mln at 7.875% double supply

2 min read
Demand for five-year eurobonds of Ukrzaliznytsia for $300 mln at 7.875% double supply

JSC Ukrzaliznytsia notes the high interest of investors in the issue of eurobonds of the company for $300 million.

According to Ukrzaliznytsia's website, according to the results of pricing, the rate of return on eurobonds was 7.875% per annum, which is lower than the coupon for the 2019 bond issue.

"Investors have shown high interest in financing the company - the demand for the acquisition is double the company's supply, applications for financing have been received from 70 investors, mainly from the UK and Switzerland," the statement said.

The company also stressed that based on the results of meetings with investors and pricing, Ukrzaliznytsia was the first of the quasi-sovereign companies in the post-COVID period to attract unsecured financing in the amount of $300 million by issuing loan participation notes in the Reg S format for a period of five years.

"Against the background of a difficult previous financial year, it is worth noting investor confidence in Ukrzaliznytsia as a responsible borrower that properly serves its financial obligations. Given regulatory restrictions and, accordingly, limited resources in the local market, the international capital market is a reliable alternative and transparent source of market financing at a market rate for Ukrzaliznytsia," acting head of the company Ivan Yuryk said.

The funds raised during the issue will be used to refinance the existing debt in order to reduce the cost of financing the company and cut burden on its liquidity.

"Thus, the issue of bonds will not lead to an increase in the size of Ukrzaliznytsia's loan portfolio, but will exclusively reduce debt in the short term, and will have a positive effect on the company's credit rating," the report says.

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