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
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).
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.
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.