• Eng

Uralkali may return for more bonds

Euroweek /

Russian potash producer Uralkali could return for more dollar Eurobonds before the end of 2013, Victor Belyakov, Uralkalis CFO has told EuroWeek.

"If it happens that there is one window where we can raise cheap debt, rather than wait six months and pay more, it is probably better to use this window," said Belyakov. "We could do another Eurobond this year, subject to market conditions [...] We monitor the market very closely. If we see there is a window, we would consider it."

The company issued its debut $650m 3.723% 2018s in April. There was a $2.3bn book for the deal, which was rated Baa3 by Moody's, and BBB- by Fitch.

Bank of America Merrill Lynch, Goldman Sachs, Sberbank and VTB Capital arranged the deal. It was priced at par but had fallen to 99 by Tuesday because of heavy Russian corporate bond supply since that time and a more volatile market over the last few days.

The company is only considering raising dollar debt

"We prefer to have the whole debt exposure in dollars because most of our sales are denominated in dollars," said Belyakov. "That is why raising debt in dollars is a natural hedge for us."

Belyakov hopes that Uralkali's presence on the Eurobond market will help boost the company's share price.

Uralkali's London GDRs closed at $39.10 on Friday.

"I am absolutely sure that the debut issue will indirectly but positively influence our attractiveness in the equity markets as well because it's an indicator that Uralkali is investment grade with good corporate governance and no liquidity problems," said Belyakov.
"This will stimulate demand for our shares. There is not a direct connection where you issue Eurobonds and your shares go up 5%, but there is some connection."

Headquartered in the Perm region, Uralkali has been the world leader in potash production since completing a $24bn merger with fellow Russian firm Silvinit in 2011. The combined company accounts for 20% of annual global production of the fertiliser ingredient.

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