Russia's Evraz seeks OK to lift leverage ratio covenant from 8¼% notes

By Susanna Moon

Chicago, Nov. 14 - Evraz Group SA began a consent solicitation to remove a leverage ratio covenant under its $750 million 8¼% guaranteed notes due 2015, which are guaranteed by Mastercroft Ltd.

The company will hold a meeting on Dec. 10 to ask noteholders to remove the covenant that requires maintaining a net leverage ratio at or below a specified level. There is $576.7 million principal amount of the notes remaining.

If the measure passes, holders who vote for it by the early deadline will receive $4.50 per $1,000 principal amount of notes and those who vote for it by the late deadline will receive $2.50 per $1,000 of notes.

The early instruction deadline is on Dec. 5, and the late instruction deadline is on Dec. 7.

J.P. Morgan Securities plc (+44 20 7134 3414, emea_lm@jpmorgan.com, attn.: liability management group) and Deutsche Bank AG, London Branch (+44 20 7545 8011, liability.management@db.com, attn.: liability management group) are the solicitation agents, and Bank of New York Mellon, London Branch (debtrestructuring@bnymellon.com for general enquiries relating to the meeting or ct_reorg_unit_inquiries@bnymellon.com for those regarding DTC instructions) is the tabulation agent.

The issuer is not in breach of any of the covenants and is seeking amendments to the covenant package to align the covenants with those of other series of notes, according to a press release. None of the other note series contain a covenant that requires the issuer to maintain a specific net leverage ratio, the release noted.

Evraz is a Moscow-based steel producer.

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