Kernel debut $500 million 8.75% eurobond issue

Overview:

• Agribusiness Kernel Holdings issued a $500 million eurobond in what was the first successful corporate offering of this type by a Ukrainian business since 2013 when the country's government collapsed amid a populist uprising.
• The world's largest sunflower oil producer, Kernel is registered in Luxembourg and listed in Warsaw but its roots and the majority of its operation are in Ukraine. 
• The eurobond, which received a better rating (B+ by Fitch, B by S&P) than that of Ukraine's sovereign, has a coupon of 8.875% and matures in five years.
• Kernel intends to use the proceeds from the bond to increase capacity at its Black Sea grain terminal and to acquire a sunflower oil processing plant. 
• After Ukraine's government was ousted by separatists in 2013, the country's already struggling economy went into a deep recession and, until Kernel's issue, the only bond activity has been debt restructuring.
• JP Morgan Securities and ING Bank were joint lead managers on the eurobond. 

Ben Naylor - Regional editor