14:49 08.07.2015

Ukreximbank noteholders approve debt reprofiling

3 min read
Ukreximbank noteholders approve debt reprofiling

Kyiv-based state-run Ukreximbank has secured the agreement of the majority of its noteholders to reprofile debts worth $1.475 billion in total for another seven years.

"Joint Stock Company "The State Export-Import Bank of Ukraine" is pleased to announce that holders of the U.S.$750,000,000 8.375% Loan Participation Notes due 2015 issued by BIZ Finance Plc (the Issuer), the U.S.$125,000,000 Loan Participation Notes due 2016 issued by the Issuer and the U.S.$600,000,000 8.75% Loan Participation Notes due 2018 issued by the Issuer approved the relevant Extraordinary Resolutions set out in the consent solicitation memorandum dated June 8, 2015 at the noteholders' meetings that took place on July 7 by majorities of 79.37%., 89.41%, and 99.59% of the votes cast, with quorums of 92.15%, 79.31%, and 80.79%, respectively," Ukreximbank said in an official statement.

The change in the conditions of the LPN issue is subject to approval by the National Bank of Ukraine (NBU).

"We are grateful to the Ad Hoc Committee and the noteholders for the overwhelming support that they have shown at the noteholders' meetings. We look forward to bringing the reprofiling of the Notes to a successful conclusion," Chairman of Ukreximbank's Board of Directors Oleksandr Hrytsenko said.

As reported, the ad hoc committee of the holders of 30% of Ukreximbank loan participation notes supported their restructuring. Investors, in particular, approved changes to the terms of LPN circulation with a maturity term until July 27, 2015 in accordance with the bank's proposal, which was released on April 20. According to the proposal, the maturity of the securities has been extended by seven years. At the same time, a depreciation mechanism is foreseen for the repayment of securities: 50% of the principal amount on April 27, 2019, the remaining 50% - in six equal semi-annual installments. The coupon rate on LPNs has been increased to 9.625% from 8.375% per annum.

The ad hoc committee also approved the extension of all of the other bank's loan participation notes worth $125 million due on February 9, 2016 and worth $600 million due on January 22, 2018 for seven years.

As in the previous case, both issues foresee an amortization repayment mechanism: on 2016 LPNs 50% of the principal amount are payable on February 9, 2020, the remaining 50% - in six equal semi-annual installments starting from August 9, 2020; 2018 LPNs - 50% of the principal amount is payable on January 22, 2021, the remaining 50% - in eight equal semi-annual installments starting from July 22, 2021. The coupon rate on 2016 LPNs is increased to 7% plus six-month LIBOR from 5% plus 12-month LIBOR, on 2018 LPNs - to 9.75% from 8.75% per annum.

Ukreximbank's debt reprofiling is in line with the general plan to reduce Ukraine's debt burden. The bank was advised by Lazard Frères acting as a financial advisor. White & Case LLP and Sayenko Kharenko acted as legal advisors to the bank. The Ad-Hoc Committee was advised by Brown Rudnick LLP as a legal advisor.

Ukreximbank was founded in 1992. It is wholly owned by the state.

It ranked 3rd in terms of overall assets among 158 operating banks as of January 1, 2015, according to the NBU.

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