Bank Nadra likely to complete bond restructuring by late June, experts say

Bank Nadra (Kyiv) is likely to achieve agreement with its creditors regarding restructuring eurobonds worth $175 million by late June 2010, market operators polled by Interfax-Ukraine have said.

According to market participants, the bank has improved its restructuring proposal, offering eurobond holders to pay $18 million of $175 million at once and write off 52.5% of the remaining debts. The bank plans to issue new eurobonds at a rate of 8% per annum for seven years to cover the remaining sum of obligations. As a result the bank will pay 53% of the total current debt to creditors, while in November 2009 the creditors were offered only 46% of the debt. If the eurobond holders agreetotheterms, the bank will have to pay $12 million more compared to the agreement achieved in November.

According to Oleksandr Pecheritsyn, the head of the department for analyzing financial markets at ING Bank, such terms of eurobond restructuring could become profitable both for the bank and the eurobond holders.

"In particular, such restructuring will be profitable for investors, taking into account expectations that the bank would not return deposits, especially when the government intended to liquidate the bank. Therefore the restructuring will allow them to expect the return of at least part of their investment," he said.