Companies@UA: База компаний Украины

Kyiv, July 24 (Interfax-Ukraine) – A mere 20% of the holders of telecoms giant Ukrtelecom's B-series bonds have submitted their securities for a buy-back offer due on July 27, 2009, after the yield on the bonds for fifth to ninth coupon periods was raised from 15% to 19% per annum, say experts polled by Interfax-Ukraine.

"The company offered bondholders an annual 19% yield for the next four coupon periods. These conditions, according to our information, have turned out to be acceptable for most of the holders," said Maksym Buhriy, a consultant from Troika Dialog Ukraine, the underwriter of the bond issue.

"The buy-back offer was taken up by a mere 20% of the holders."

Andriy Shevchyshyn, the head of the TASK investment group's analytical department, said that a 15% rate is uncompetitive today, while a 19% yield could compete with the current market yields on government domestic loan bonds.

However, he believes that the rise in the yield on Ukrtelecom's bonds could have hardly reduced the amount of the securities submitted for the buy-back offer because of the problems with liquidity in the corporate sector, the low level of investors' working capital, and high risks on the forex and banking market.

"Those who originally planned to take up the offer are unlikely to have changed their mind. Investors who are hesitating are likely to submit their securities for the offer," he said.

Analyst of the Sokrat investment group Mykhailo Salnykov said that the increase in the coupon is linked mainly with Ukrtelecom's good performance in the second quarter of 2009. According to him, the telecoms operator made a good showing in that period, which made it possible to reduce the losses in the first half of 2009 due to an increase in communications rates and a rise in earnings from the growing mobile communications and Internet clientele.

"Taking into consideration the fact that the major holders of Ukrtelecom's bonds are state banks, no wonder that 80% of the bond issue were not claimed in the buy-back," Salnykov said. "The increase in the coupon on the bonds should be considered as a measure aimed at transferring part of the revenues for the first half to the state banks rather than an attempt to prevent a large-scale buyback."

As reported earlier, Ukrtelecom in July 2009 issued B-series bonds worth UAH 250 million at a face value of UAH 1,000 per bond at an annual yield of 15% for the first 12 months of circulation.

The bond issuance conditions foresee a quarterly payment of the yield and an annual at-par buy-back offer.

The bonds are to mature on July 25, 2011.

OJSC Ukrtelecom holds the monopoly on Ukraine's fixed communications market. As of today, the state owns 92.79% of the stocks in the company, while 7.14% of its stocks were sold to employees via a closed subscription.