RUSAL unveils bond plans

The company plans not a one-off campaign but a flexible program comprising several bond issues to be offered according to demand, a RUSAL official told RBC Daily. The revenue will be used to increase the group’s working capital.

The company wants to use new financial instruments amid a shrinking loan market, RUSAL’s managers explained: “Bonds are already used successfully by large companies such as Russian Railways.”

Yegor Fedorov, an analyst at the Bank of Moscow, is skeptical about RUSAL’s bond plans. With things as they are, the market is simply unable to digest the bond pie without the government’s help, he argued. A better option for the aluminum maker would be offering its bonds to state banks, Fedorov believes.

For RUSAL, with its debt estimated at $16.3 bln, any and all refinancing options are desirable, RBC Daily reports. The company owes some $7 bln to foreign banks, $6.5 bln to Russian banks (including a $4.5 bln loan from the Development Bank), and $2.28 bln to Mikhail Prokhorov, the owner of Onexim Group.

According to some reports, Oleg Deripaska is currently in talks with creditors, but if no agreement is reached the group could lose its most precious asset – the aluminum company.