OAO Mechel (MTLR), Russia’s largest producer of coal for steelmakers, agreed to pay a fee of 50 to 65 basis points to lenders agreeing to new covenants on the company’s debt, DebtWire reported, citing people it didn’t identify.
Banks on Mechel’s $2 billion syndicated loan, led by BNP Paribas SA (BNP), ING Groep NV (INGA) and UniCredit SpA (UCG), agreed to cap Mechel’s ratio of net debt to earnings before interest, taxes, depreciation and amortization at 5.5 this year, 4.4 in 2013 and 3.75 in the first half of 2014, DebtWire said April 26. The lenders agreed to an interest coverage ratio of at least 2.65 this year, 3.5 for 2013 and 4 for the first half of 2014, DebtWire said.
Mechel will pay 50 basis points to lenders that sign up for the revised covenants as well as an “early-bird fee” of 15 basis points for lenders who agreed by mid-April, according to the report.
The company has received waivers on debt from more than 25 international banks, it said yesterday without disclosing the revised terms. Ekaterina Videman, a spokeswoman for Mechel in Moscow declined to comment late yesterday on the DebtWire report.
“Systematic deleveraging as a whole, and reduction of short-term debt in particular,” is a priority for the company, Chief Financial Officer Stanislav Ploschenko said in a statement yesterday.
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