MHP proposes amendments to covenants to its 2020 Eurobond

If the Myronivsky Hliboproduct (MHP) bondholders accept the proposed amendments, it will help the company to be more flexible in using credit facilities in its construction projects. This is stated by investment analyst at Concorde Capital Andrew Perederey.

"Also, such changes may hint at the company’s aspiration to acquire some new assets. So it looks like the company is removing the last barriers before some deals. It doesn’t change our bullish view on MHP stock and neutral view on its Eurobonds," he notes.

MHP proposed amendments to covenants to its April 2020 Eurobond (USD 76.4 mln outstanding) and will make a consent payment in the amount of a 0.5% principal amount, according to the company’s Sept. 20 announcement. The amendments will harmonize the covenants with the other two bonds, maturing in 2024 and 2026.

The other two amendments will clarify the terms "Consolidated Total Assets" and "IFRS." Also, the company’s announcement pointed that such changes will "enable to finance all of its crops and products consistent with its current business model and proceed with select acquisitions in line with the company’s strategy."