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Concorde Capital Research: Ukrainian Railway pays USD 150 mln amortization on Eurobond

March 15, 2019 | Cbonds

Ukrainian Railway (RAILUA) reported on March 14 it has paid on time a USD 150 mln first amortization payment on its USD 500 mln Eurobond, along with scheduled coupons. The company reported that the payment was made “with the support of Ukraine’s Cabinet of Ministers.” Namely, the company attracted refinancing (in both dollars and hryvnia) from state Oschadbank (OSCHAD) and the State Agency for Support of Infrastructure Projects.

The company’s existing Eurobond was issued in February 2016 to replace another bond as part of the company’s debt restructuring operation. The bond amortizes by USD 150 mln on March 15 and September 15, 2019, and then semi-annually by USD 50 mln until September 2021.

Alexander Paraschiy: The timely payment is an expected event, but the company having to seek refinancing from various government-controlled entities does not inspire confidence. On the one hand, it illustrates the government's wish to remain solvent on all quasi-sovereign bonds. On the other hand, it illustrates a lack of liquidity inside the railway operator.

The company still has a chance to replenish liquidity with a new placement of public or private international debt before the next large repayment in September (USD 167 mln, including amortization and coupon). Also, the company might accumulate its own resources, if the government agrees to further increase cargo rates. If it doesn't succeed, it will likely rely again on state support for securing the next payment. That said, we remain confident that in half a year, the government will remain committed to servicing all its international debt.

Issue: Ukrainian Railway, 9.875% 15sep2021, USD

StatusCountry of riskMaturity (option)AmountIssue ratings (M/S&P/F)
outstandingUkraine09/15/2021350,000,000 USD-/CCC+/B-

Company: Ukrainian Railway

Full company nameUkrainian Railway
Country of riskUkraine
Country of registrationUkraine
IndustryTransportation

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