Naftogaz pays for restructuring of its eurobonds, announces their new amounts
The Naftogaz Group has paid the agreed-upon interest and fees for the restructuring of eurobonds issued through Kondor Finance in the amount of EUR 600 million, maturing on July 19, 2026, and $500 million, maturing on November 8, 2028, to January 15, 2032, and January 15, 2033, respectively.
According to a stock exchange announcement on Friday, taking into account the capitalization of the remaining interest, the new outstanding principal amount of the 2026 eurobonds is now EUR 704.48 million, while that of the 2028 eurobonds is $592.33 million.
According to the Stuttgart Stock Exchange, the 2026 eurobonds are currently trading at 89.9% of par value, compared to 83.1% in early June prior to the announcement of the restructuring agreement with the ad hoc committee, while the 2028 eurobonds on the Frankfurt Stock Exchange are trading at 87.0% of par, compared to 79.9% in early June.
As previously reported, under the terms of the restructuring, 80% of the interest accrued but unpaid as of the transaction date on the 2026 eurobonds was to be repaid in cash, while the remaining 20% and 100% of the accrued interest on the 2028 eurobonds were capitalized.
The restructuring fee paid to holders of the 2026 eurobonds was 1% of face value, and for the 2028 eurobonds, 0.5%; and for the ad hoc committee, which represented holders of approximately 40% of the bonds, it was an additional 0.25%.
The quorum at the meeting regarding the 2026 eurobonds was 97.02% of all bonds, with 99.43% of votes cast in favor. For the 2028 eurobonds, these figures were 94.67% and 99.7%, respectively.
It was proposed to gradually redeem the new 2032 eurobonds in euros according to the following schedule: 6% (EUR 41.68 million) on January 15, 2027, 7.5% (EUR 52.1 million) – July 15, 2027, and then in equal semi-annual payments starting July 15, 2029.
For the 2033 eurobonds denominated in U.S. dollars, the amortization schedule is different: 17.5% from July 15, 2030, through January 15, 2032, and 15% on July 15, 2032, and January 15, 2033.
The coupon rate for both the 2026 eurobonds, which was 7.125%, and the 2028 eurobonds, which was 7.625%, has been raised to 8.95% per annum.
At the same time, for the first three coupon payments, Naftogaz will be able to pay 6% in cash, and issue additional bonds to cover the remaining 2.95%; for the fourth payment on July 15, 2028, this ratio will change to 6.5% and 2.45%, after which all coupons will have to be paid in cash.
According to the proposal, the covenants for both eurobond issues will remain in place. At the same time, concessions have been made to allow Naftogaz to raise loans from international financial institutions and state-owned banks.
Another new condition is a ban on dividend payments until the eurobonds are fully repaid, though this does not apply in cases where the company is required to do so under current Ukrainian law.
Furthermore, Naftogaz must maintain a rating from at least one rating agency at all times until the Eurobonds are repaid, and must also consider using funds awarded by an arbitration ruling in the dispute against the Russian Federation to repay the Eurobonds.
Naftogaz has selected Rothschild & Co. as its financial advisor to facilitate communication with bondholders and formulate a proposal.