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Novolipetsk Steel

September 21, 2017

NLMK closes its U.S.$500 million 7-year Eurobond offering

NLMK (LSE: NLMK), the largest steel producer in Russia and a leading international steel company, today announces the closing of its U.S.$500 million 7-year Eurobond placement with an annual coupon rate of 4.00%. Interest payments on the Eurobonds are payable semi-annually.

The proceeds from the issue will be used to finance the purchase of existing Notes due 2018 and 2019 in accordance with the terms and conditions of the Tender Offer announced on 4 September 2017 (settlement is expected on 26 September 2017), as well as for NLMK’s general corporate purposes and refinancing of its current debt.

The final order book indicated a high level of demand from a broad range of international investors, including investors in Europe (38%), the United States (33%), and Russia (25%). Approximately 60% of the issue was purchased by asset managers.

J.P. Morgan and Société Générale acted as the Joint Global Coordinators and Joint Bookrunners, and ING and UniCredit Bank acted as the Joint Bookrunners for the new issue. The 4.00% Loan Participation Notes due 2024 were issued by Steel Funding D.A.C., an Irish company formed for the purpose of issuing debt instruments for financing loans to NLMK.

Sergey Karataev, acting Chief Financial Officer of NLMK, commented: “The successful placement reflects the high level of strong investor confidence in NLMK’s business model and its financial strategy. We took advantage of favourable market conditions and strong demand from international investors for high quality credit. The 4.00% coupon represents the lowest rate ever achieved by Russia’s non-state-owned issuers for a benchmark U.S.$ Eurobond issue of 7 years or longer. The issue reduces our funding costs and supports future strategic development of the NLMK Group.”




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