Eurotorg announces subscription to 5-year Eurobonds with price guidance at 9.375-9.5% worth $300m
<p> MINSK, Oct 15 – PrimePress. Belarus’ largest retailer Eurotorg LLC on Oct 15, 2020 announced a subscription to its 5-year corporate Eurobonds worth $300 million with price guidance at 9.375-9.5%, a source in the banking circles told RIA Novosti. </p> <p> </p> <p> As previously reported, Fitch Ratings assigned LLC Eurotorg’s planned loan participation notes (LPNs) worth $300 million an expected rating of 'B(EXP)'/'RR4'. Fitch also affirmed LLC Eurotorg's Long-Term Issuer Default Rating (IDR) at 'B' with Stable Outlook. </p> <p> </p> <p> The LPNs will be issued by Bonitron Designated Activity Company, an SPV domiciled in Ireland. The SPV is limited to issuing the notes and providing a loan to Eurotorg. The notes will be secured by a loan to Eurotorg, which will rank equally with its other senior unsecured obligations. The assignment of final instrument rating is contingent on the successful placement of LPNs and completion of tender offer for its existing LPNs. Final documents should conform to information already received. </p> <p> </p> <p> The Stable Outlook reflects Fitch's expectation that the company will restore free cash flow (FCF) generation from 2021, after a one-off investment in working capital in 2020. Fitch analysts also assume that political protests in Belarus, which started in August 2020, will not cause any material disruption to its operations. </p> <p> </p> <p> Fitch says the rating is supported by Eurotorg's strong market position as the largest food retailer in Belarus, with a 19% market share by sales in 2019. This is higher than the combined market share of the next five competitors. The company benefits from its well-recognised Euroopt brand across the country and has recently launched new discounter formats Hit! and Groshyk to fend off competition in areas highly penetrated by other modern retail chains. </p> <p> </p> <p> Eurotorg faces high FX risks as its debt is fully in foreign currency, while its revenue is in Belarusian roubles. In addition, part of Eurotorg's costs (1H20: 2.7% of revenue) is also exposed to FX as operating lease agreements are primarily in hard currency. </p> <p> </p> <p> “We assume that weak financial market development in Belarus will not allow the company to fully switch the currency of its debt and operating lease agreements to Belarusian roubles over the medium term. Nevertheless, funding in Russian roubles (1H20: 34% of total debt after swap) provides some financial flexibility as Belarusian and Russian roubles have shown some correlation in the past.” </p> <p> </p> <p> Eurotorg has been operating since 1993, the first shop under the brand name Euroopt was opened in 1997. Eurotorg’s self-estimated share in the retail market of Belarus stands at 19%. End </p>
2020-10-16
Primepress
MINSK, Oct 15 – PrimePress. Belarus’ largest retailer Eurotorg LLC on Oct 15, 2020 announced a subscription to its 5-year corporate Eurobonds worth $300 million with price guidance at 9.375-9.5%, a source in the banking circles told RIA Novosti.
As previously reported, Fitch Ratings assigned LLC Eurotorg’s planned loan participation notes (LPNs) worth $300 million an expected rating of 'B(EXP)'/'RR4'. Fitch also affirmed LLC Eurotorg's Long-Term Issuer Default Rating (IDR) at 'B' with Stable Outlook.
The LPNs will be issued by Bonitron Designated Activity Company, an SPV domiciled in Ireland. The SPV is limited to issuing the notes and providing a loan to Eurotorg. The notes will be secured by a loan to Eurotorg, which will rank equally with its other senior unsecured obligations. The assignment of final instrument rating is contingent on the successful placement of LPNs and completion of tender offer for its existing LPNs. Final documents should conform to information already received.
The Stable Outlook reflects Fitch's expectation that the company will restore free cash flow (FCF) generation from 2021, after a one-off investment in working capital in 2020. Fitch analysts also assume that political protests in Belarus, which started in August 2020, will not cause any material disruption to its operations.
Fitch says the rating is supported by Eurotorg's strong market position as the largest food retailer in Belarus, with a 19% market share by sales in 2019. This is higher than the combined market share of the next five competitors. The company benefits from its well-recognised Euroopt brand across the country and has recently launched new discounter formats Hit! and Groshyk to fend off competition in areas highly penetrated by other modern retail chains.
Eurotorg faces high FX risks as its debt is fully in foreign currency, while its revenue is in Belarusian roubles. In addition, part of Eurotorg's costs (1H20: 2.7% of revenue) is also exposed to FX as operating lease agreements are primarily in hard currency.
“We assume that weak financial market development in Belarus will not allow the company to fully switch the currency of its debt and operating lease agreements to Belarusian roubles over the medium term. Nevertheless, funding in Russian roubles (1H20: 34% of total debt after swap) provides some financial flexibility as Belarusian and Russian roubles have shown some correlation in the past.”
Eurotorg has been operating since 1993, the first shop under the brand name Euroopt was opened in 1997. Eurotorg’s self-estimated share in the retail market of Belarus stands at 19%. End