Moscow, 5 December 2017 – PJSC ALROSA, the global leader in rough diamond production, has improved its loans and borrowings position to reduce financial costs.
ALROSA has made an early repayment of a part of its USD 720 million bank loan due in 2019 with an interest rate of 4.3%, and refinanced the remaining balance at lower rates.
In July 2017, S&P improved ALROSA’s credit rating to match the BB+ sovereign rating, which has opened up new opportunities for borrowing cost reduction. From September to November 2017, ALROSA was conducting a competitive procurement process among Russian and international banks, following which USD 600 million out of USD 720 million were refinanced through two new loans of USD 350 million and USD 250 million issued by Raiffeisenbank and Rosbank, respectively, due for repayment in December 2018. The remaining balance of USD 120 million was repaid ahead of schedule using the Company's free cash flow. These initiatives have reduced ALROSA’s debt to USD 1.84 billion.
“We managed to borrow from international banks at a rate lower than the yield to maturity of ALROSA’s Eurobonds, which confirms the Company’s stable financial position. The impact of lower interest rate payments driven by these initiatives will exceed USD 30 million,” - said Alexey Philippovskiy, Chief Financial Officer of ALROSA.