The international rating agency Fitch Ratings has assigned the 5-year guaranteed Eurobonds Interpipe Holdings plc of the Ukrainian billionaire Viktor Pinchuk, issued at the rate of 8.375% per annum, the final senior unsecured rating of 'B' with an asset recovery rating of 'RR4'.
In accordance with the Fitch scale, the 'B' ratings are speculative and imply certain credit risks with a limited margin of safety. An 'RR4' asset recovery rating indicates an average outlook for recoveries in case of default.
Interpipe announced the pricing of Eurobonds on the evening of May 6, the settlement of the deal and the issue of bonds are scheduled for May 13. There is a possibility of early redemption in two years at the price “par + 50% of the coupon rate”, in three years - at the price “par + 25% of the rate” and in four years at par. Half of the funds raised are planned to be used for general corporate purposes, the remaining 50% of the proceeds can be used to pay special dividends to shareholders. Listing of securities, interest on which will be paid every six months, is scheduled in Luxembourg.
The Agency points out that Interpipe's long-term issuer default rating (IDR) at 'B' takes into account the smaller size of the group compared to peers, the risks of operating conditions in Ukraine and the global oil and gas markets, as well as changing financial policies. Interpipe is also forced to expand the geographic diversification of sales of its wheels after the imposition of a ban on imports by Russia, the report said.
At the same time, Fitch notes that these shortcomings are balanced by a high share of value-added steel products (pipes and railroad products) and Interpipe's leading position in the domestic and regional markets for seamless pipes and wheels. Among other advantages, the agency names the use of scrap as a raw material at competitive prices, as well as the geographical diversification of sales.
Interpipe is a Ukrainian industrial company, a manufacturer of seamless pipes and railway wheels. The company's products are supplied to more than 80 countries around the world through a network of sales offices located in the key markets of the CIS, the Middle East, North America and Europe.
The company has five industrial assets: Interpipe Nizhnedneprovsk Pipe Rolling Plant (NTZ), Interpipe Novomoskovsk Pipe Plant (NMPP), Interpipe Niko-Tube, Dnepropetrovsk Vtormet and the Dniprostal electric steel-making complex under the Interpipe Steel brand.
The ultimate owner of Interpipe Limited is Ukrainian businessman Victor Pinchuk and his family members.