Polymetal secures new $250m long-term loan

Polymetal International has secured a $250m long-term five-year fixed-rate loan with Alfa-Bank.

The FTSE 250 precious metals miner said the loan, which has created a "significant" liquidity reserve at an attractive fixed interest rate and is repayable in 2023, will be used primarily to refinance maturing debt.

The company's average interest rate in the first half of 2018 was 4.11%, versus 3.96% in 2017 and 4.33% in 2016, with 47% of its portfolio at a fixed interest rate. Polymetal said its average borrowing rate has been consistently low despite meaningful growth in base interest rates over the last two years.

As at 30 June 2018, net debt stood at $1.65bn, which is 2.08 times adjusted earnings before interest, taxes, depreciation and amortisation. The group said that as in prior years, stronger production and a traditional seasonal working capital drawdown should drive stronger free cash flow generation in the second half and bring its net debt down by year end to its normalised levels and below 2.0x adjusted EBITDA.

"This is an excellent transaction which provides for stability of funding to support our development strategy going forward. I am very pleased to see that even in today's turbulent environment, Polymetal continues to source long-term financing on attractive terms from leading financial institutions, maintaining a stable low cost of debt and a comfortable maturity profile," said chief financial officer Maxim Nazimok.