Severstal may redeem up to $ 600 million of Eurobonds

Severstal plans to buy back about $ 600 million of bonds after the steel company sold its US plants. Severstal sold its steelmaking assets to
US chasing reductions in overcapacity and falling prices for $ 2.33 billion last year. About $ 1 billion of the proceeds were distributed in the form of dividends, with the rest of the funds going to be used to reduce debt, Mordashov, who controls Severstal, said in October.

In total, Severstal may repurchase $ 600 million worth of Eurobonds maturing in 2016 and 2017. Severstal reserves the right to raise or lower the total volume of bonds to purchase. The company offered to buy the bonds in 2016 at $ 955 and in 2017 at $ 918.75, which in both cases is less than the par value of $ 1,000. The deal will be funded from free cash flow, allowing the Cherepovets-based company to reduce its debt.

Some Russian companies are also cutting their external debt amid the slump in oil and ruble prices. Evraz, a serious competitor to Severstal, is buying back bonds worth $ 278.600 million in 2015 after selling its North American unit. Long-term dollar-denominated bonds are very profitable, so MMC Norilsk Nickel can also buy back its debt if a good opportunity arises.