November 30 (SeeNews) - Fitch Ratings said on Wednesday that a decision by Eurohold Bulgaria [BUL:EUBG] to make a tender offer to repurchase a 70 million euro ($72.5 million) bond due next week and to extend its maturity will have no impact on the group's credit rating.
"We regard Eurohold’s tender offer and consent solicitation as an opportunistic move and we do not treat it as a distressed debt exchange," Fitch said in a statement on Wednesday.
Eurohold has a current rating of B, with a stable outlook.
The group intends to buy back 70 million euro worth of notes with a 6.5% coupon, due on December 7. It has sought bondholders' consent to extend the final maturity date of the bond issuance to June 7, 2026. Eurohold requires the consent of noteholders that own 75% or more of the bonds to obtain the extension. Those noteholders who opt to tender the notes for repayment by the December 15 settlement date will be counted towards the three-quarters threshold.
"We do not believe the offer was made to avoid a default as the buyback is at par and the company’s near-term liquidity remains adequate, including cash on the accounts, an agreed bridge financing loan with an international financial institution to provide monies to fund a portion of the offer and possible intercompany loans from the insurance business or its shareholder," Fitch Ratings also said.
On Tuesday, shareholders in Eurohold Bulgaria authorised the board of directors to carry out a financing transaction worth between 75 million euro and 100 million euro at an annual yield formed by a fixed margin of up to 12% and a floating component determined either on the basis of the Euribor rate or with a short-term interest rate. The maturity may vary between 3 months and 7 years, according to a filing issued by Eurohold.
The potential financing transaction will benefit Eurohold and its subsidiary Euroins Insurance Group (EIG), the group said.
In mid-November, Fitch Ratings affirmed at B+ (Weak) the insurer financial strength (IFS) ratings of EIG and lifted the outlook to stable from negative.
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