Reclam Yields Drop on Repayment: Johannesburg Mover

New Reclamation Group (Pty) Ltd., South Africa’s lowest-rated company by Standard & Poor’s, said it will repay holders of its bonds due tomorrow after obtaining unconditional funding.

Yields on the Johannesburg-based scrap-metal exporter’s 8.125 percent notes dropped from 3,678 percent to a record-low 7.81 percent on Jan. 29 after the debt was priced at 100 percent of face value. The 149.5 million euros ($203 million) of outstanding debt traded at 90.38 cents on the euro yesterday, according to data compiled by Bloomberg.

“I’m not at liberty to say where the funds come from,” General Manager Chris Gavrielides said by phone from Johannesburg today.

Reclam, as the closely held company is known, will pay the outstanding debt to trustee Bank of New York Mellon by 10 a.m. in London tomorrow, it said in a statement on its website.

The company’s repayment options included asking its shareholders for money, raising funds through local or offshore term loans and using its properties, plant and equipment, it said in a quarterly report on its website.

S&P cut its rating on the notes three steps to D, or payment default, on Nov. 7, after the company said it bought back 24 percent of the debt at a discount of about 25 percent, which S&P said it considered as a distressed exchange.

(Corrects to show that prices, yields are for Jan. 29 in second paragraph.)
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