Debt management

Approach and characteristics

The financial policy of PJSC “Magnit” aims to ensure comfortable conditions for the Company in its work on loan agreements with banks.

The main criteria for the financial policy include restrictions on a comfortable margin for financial covenants, net debt/EBITDA, revenue, net assets, requirements for the available limit on loan agreements, and conditions for raising new loans.

Some of the key features of Magnit’s loan portfolio and history include

  • The Company’s impeccable credit history
  • Cooperation with major banks
  • Low debt load: net debt/EBITDA ratio – 1.5
  • No currency risk: 100% of debt is denominated in rubles, which corresponds to the revenue currency
  • Minor changes in interest rate risk: interest is mainly paid at fixed interest rates
Key debt portfolio indicators:
Indicator 2016 2017 2018
Debt dynamics (million rubles)
Total debt 127,606 126,460 164,573
Proportion of short-term debt, % 39.3% 31.7% 43.0%
Short-term debt 50,106 40,122 70,837
Long-term debt 77,500 86,338 93,736
Net debt 111,047 108,123 137,826
Credit indicators
EBITDA/Financial expenses 8.1 7.1 9.8
Net debt/LTM EBITDA 1.0 1.2 1.5
Bonds

The Company uses bonded loans as a form of debt financing for its business that is primarily raised by issuing exchange bonds.

In 2018, PJSC “Magnit” had 2 outstanding issues of exchange bonds (BO-001R-02 and BO-001R-03) with a total nominal volume of RUB 20 billion (the volume in circulation at the end of the reporting year was RUB 0 billion).

Parameters of the BO-001R-02 series bonded loan of PJSC “Magnit”:
Issue identification number and assignment date No. 4B02-02-60525-Р-001P dated February 24, 2016
Volume of issue RUB 10,000,000,000
Number of securities 10,000,000
Nominal value of each security RUB 1,000
Placement price 100% of nominal value
Placement date February 29, 2016
Placement method public placement
Maturity date 728 days from the placement date (February 26, 2018)
Number of coupons 4
Trading code RU000A0JW662
ISIN code RU000A0JW662
Coupon interest rate at auction 11.20%
Interest rate for coupon 1 11.20%
Interest rate for coupon 2 11.20%
Interest rate for coupon 3 11.20%
Interest rate for coupon 4 11.20%

The fourth coupon yield on the BO-001Р-02 series Exchange Bonds was paid on February 26, 2018. Total income paid on the fourth coupon amounted to RUB 558.5 million; income per one bond on the fourth coupon amounted to RUB 55.85.

PJSC “Magnit” fulfilled its obligations to bondholders and redeemed the par value of the BO-001R-02 series bonds on time and in full on February 26, 2018.

Parameters of the BO-001R-03 series bonded loan of PJSC “Magnit”:
Issue identification number and assignment date No. 4B02-03-60525-Р-001P dated April 4, 2016
Volume of issue RUB 10,000,000,000
Number of securities 10,000,000
Nominal value of each security RUB 1,000
Placement price 100% of nominal value
Placement date April 12. 2016
Placement method public placement
Maturity date 728 days from the placement date (April 10, 2018)
Number of coupons 4
Trading code RU000A0JWCF4
ISIN code RU000A0JWCF4
Coupon interest rate at auction 10.60%
Interest rate for coupon 1 10.60%
Interest rate for coupon 2 10.60%
Interest rate for coupon 3 10.60%
Interest rate for coupon 4 10.60%

The fourth coupon yield on the BO-001Р-03 series Exchange Bonds was paid on April 10, 2018. Total income paid on the fourth coupon amounted to RUB 528.5 million; income per one bond on the fourth coupon amounted to RUB 52.85.

PJSC “Magnit” fulfilled its obligations to bondholders and redeemed the par value of the BO-001R-03 series bonds on time and in full on April 10, 2018.

In order to ensure the ability to raise debt financing by issuing local bonds of PJSC “Magnit,” three Exchange Bond Programs are available with an undrawn limit of a combined RUB 110 billion. The bond programs are perpetual, which will enable the Company to promptly organize the issuance(s) of exchange bonds should the need arise to finance its operations.