METINV 7¾ 04/23/2023

Metinvest BV

Credit, Industrial/Transportation


Publicly traded companies mentioned herein: N/A

Highlights

The presenter is long the 7 ¾ bonds with a 2023 maturity issued by Metinvest BV (METINV 7 ¾ 04/23/2023), a vertically integrated iron ore processor in Ukraine and the US with assets across Central and Eastern Europe. Investors have the chance to buy these bonds at a 38% discount to par with all of the value of the security covered by the company’s offshore assets (non-Ukraine), meaning any additional value the company can salvage from Ukraine could put the bonds above par. Metinvest is currently producing iron ore out of Ukraine at about 40% capacity and generating roughly $1B in annual FCF, which the presenter views as creating the company for nothing at this level. Even without this contribution from the Ukrainian assets, the company has the cash needed to cover these expenses. Hopefully, hostilities in the Ukraine will ease, and if so, any remaining assets should represent additional profits. 

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Idea Discussion

Commentor 1 - 2 weeks ago

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