Ukrainian Railways guides $500 million notes at 8 3/8% area

Chicago, July 2 – Rail Capital Markets plc, a subsidiary of JSC Ukrainian Railways, firmed guidance on its upcoming issue of $500 million loan participation notes (expected CCC+/B-), according to a market source.

The notes are expected to price within a range of 8 3/8% plus or minus 12.5 basis points.

Books are in excess of $2.5 billion.

As previously reported, the Regulation S only notes are being sold via joint lead managers JPMorgan (billing and delivery) and Dragon Capital.

The notes have a change-of-control put at 101% if the State of Ukraine owns less than 100% of the company or the company is privatized.

The proceeds will be used to fully repay Ukrainian Railways’ bridge loan from JSC Oschadbank and FinInPro maturing Aug. 1 and to address upcoming amortization payment under the 2016 notes due in September, with the balance for partial repayment of certain other debt as well as for capital expenditures and working capital.

Ukrainian Railways is based in Kiev and is the country’s state railroad network operator.

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