Fixed Income

October 26, 2020

In corporate papers, agricultural holding Kernel placed a Eurobond with maturity in 2027, raising USD 300mn at 6.75%. Fitch Ratings has assigned Kernel’s new bond a senior unsecured rating of ‘BB-’. Kernel’s rating is higher than Ukrainian poultry producer MHP (B+/Stable), which is more exposed to the domestic market than Kernel, although it operates in a less volatile sector. Kernel will be use the proceeds of the new issue to repay part of its USD 500mn Eurobond maturing in January 2022. The Kernel-22s issue traded at 104.6 (5.0% YtM) last week. In other debt papers, EUR-denominated NaftoGaz-24s lost 1.3% to 95.0 (8.9% YtM) after the company decided not to place a 7-year USD 500mn Eurobond which had received indicative bids at a too-high rate of 8.95%. On the upside, distressed issue DTEK-24s rose 3.8% to 66.4 cents on the dollar.