Petrol AD seeks bond extension, offers discounted buyback

Bulgaria’s Petrol AD has invited the remaining bondholders of its 8.37% October 2011 Eurobond to sell back a total of €10m of the bonds to the company at a cash price of 85.00. The fuel distribution company intends to extend the maturity of the remaining notes by three months. The deadline for submissions is October 4. The bond, whose original size was €100m, is trading around the mid-to low 80s. Analysts say that for investors not to accept the offer of 85.00 is risky, as it is not clear whether the company will redeem the bonds at par. Petrol reported that it had Lev65.6m ($46m) of cash at the end of June, up from Lev7.6m three months earlier, and that it made a Lev26m gross profit in the April-June quarter. Total liabilities reached Lev533.6m (€273m) at the end of June. “Earnings reports have been slightly more encouraging this year than last, but mostly because it chalked up a Lev17.4m gain in repurchasing debt at a discount,” said one analyst in London. Petrol AD disclosed earlier this year that it had paid €18.6m to repurchase €26.6m face value of its 2011 Eurobonds in the open markets. Moody’s downgraded the company from Caa3 to Caa3/LD in July, viewing the buyback as an event of limited default, as it considered it to be a distressed exchange. Fitch rates Petrol CC.

• Status
  outstanding
• Country of risk
  Bulgaria
• Redemption (put/call option)
  *** (***)
• Amount
  18,659,000 EUR
• М/S&P/F
  — / — / —

• Full name
  Petrol AD
• Registration country
  Bulgaria
• Industry
  Oil and gas