PJSC ALROSA has restructured its loans and borrowings position to achieve a significant reduction in financial costs as well as overall debt, the Company said in an announcement yesterday. The exercise included early repayment of a part of its US$ 720 million bank loan due in 2019 with an interest rate of 4.3%, and refinancing the remaining balance at lower rates.

After completion of the restructuring, ALROSA estimated that the company will benefit by over US$ 30 million and said its debt has been reduced to US$ 1.84 billion.

The exercise was made possible because new opportunities for borrowing cost reduction opened in July 2017 when S&P improved ALROSA’s credit rating to match the BB+ sovereign rating. ALROSA said that from September to November 2017, it conducted a competitive procurement process among Russian and international banks. Following this, US$ 600 million out of US$ 720 million were refinanced through two new loans of US$ 350 million and US$ 250 million issued by Raiffeisenbank and Rosbank, respectively. These are due for repayment in December 2018. The remaining balance of US$ 120 million was repaid ahead of schedule using the Company's free cash flow.

Alexey Philippovskiy, Chief Financial Officer of ALROSA, said, “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 US$ 30 million.”