TNK INTERNATIONAL CHOOSES RIGHT TIME FOR ADDITIONAL EUROBOND ISSUE
03 Feb 2003
INTERFAX
Russian analysts have reacted positively to the results of a placement of five-year Eurobonds by TNK International in London. As reported earlier TNK International on Thursday additionally placed $300 million in five-year Eurobonds with yield of 9.46% annually. Dmitry Krasilnikov, an analyst with Schroder Salomon Smith Barney - the lead-manager for the deal, said that expanding the borrowing is aimed at refinancing short and expensive loans. The timing was "very successful" because of the difficult geopolitical situation concerning Iraq and high oil prices, he added. Alfa Bank analyst Konstantin Reznikov shares the opinion that TNK International successfully placed its Eurobonds. "The price is a lot better than the one proposed at the end of October, he said. "First of all, this is as a result of the improved situation on the Eurobond market and secondly - due to the purchase of Slavneft, which increased assets and reduced risks on the company's debt,". In turn, Troika Dialog analyst Valery Nesterov considers that funds from the bond placement may be used to refinance the company's current debt, which amounts to $3 billion. Nesterov also noted that TNK International might partially use the funds received for a deal for Sidanko to acquire 26% of shares in Varieganneftegaz, which means that Sidanko will accumulate 97% of shares in this company. TNK International shareholders own 57% of shares in Sidanko. Aton analyst Temirbulat Karimov also considers the bond placement to have been successful. "The TNK International debt burden currently stands at around $3 billion due to the borrowing of funds to buy Slavneft, as a result of the placement the company will manage to reduce it to $2.5 billion by the end of 2003," he said. The company will easily be able to make payments on these Eurobonds due to high oil prices, he noted. As reported earlier, TNK International at the end of October placed $400 million in 5-year Eurobonds with yield of 11% and maturing on November 6, 2007. The new bonds have the same maturity date. Thus, the full placement totals $700 million.
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