REG - Ukraine (Min of Fin) - Ukraine reaches Agreement with Bondholders
22/07/2024 09:15
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20240722:nRSV2585Xa&default-theme=true
RNS Number : 2585X Ukraine (Ministry of Finance) 22 July 2024
NOT FOR DISTRIBUTION IN ANY JURISDICTION IN WHICH SUCH DISTRIBUTION WOULD BE
PROHIBITED BY APPLICABLE LAW.
22 July 2024
Press Release - For Immediate Release
Ukraine reaches agreement in principle with Ad Hoc Creditor Committee on Debt
Restructuring Terms
Kyiv, Ukraine: The Government of Ukraine ("Ukraine"), advised by Rothschild
& Co and White & Case LLP as financial and legal advisors,
respectively, is pleased to announce that following private discussions
between July 12 and July 19 2024 with members of the ad hoc creditor committee
(the "Committee"), advised by PJT Partners Limited and Weil, Gotshal &
Manges (London) LLP, it has reached agreement in principle with the Committee
on the key financial and non-financial terms of a proposed restructuring
transaction (the "Restructuring") in relation to Ukraine's thirteen series of
outstanding Eurobonds (the "Eurobonds") listed in Annex A. Ukraine also
discussed the agreement in principle reached with the Committee with a limited
number of additional investors (the "Investors") who indicated their support.
The Committee and the Investors consist of a number of major institutional
asset managers and other long-term investors in Ukraine representing around
25% of the outstanding amount of Ukraine's Eurobonds.
The agreement has been confirmed by the IMF staff as compatible with the debt
sustainability objectives of Ukraine's Extended Fund Facility ("EFF"), under
the baseline macroeconomic framework of the fourth review dated 28 June 2024,
taking into consideration the authorities' overall restructuring strategy. The
agreement has also been endorsed by the Group of Creditors of Ukraine.
The financial and non-financial terms of the agreement in principle are
detailed in Annex B and Annex C, respectively.
Ukraine intends to launch the Restructuring as soon as practicable, which will
be implemented through an exchange offer and consent solicitation, whereby
each series of Eurobonds will be exchanged for a package of new bonds
consisting of one or more of A Bonds and B Bonds, as further detailed in Annex
B and Annex C.
Ukraine intends to also restructure the outstanding eurobonds issued by the
State Agency for Restoration and Development of Infrastructure ("Ukravtodor"
and the "Ukravtodor Eurobonds"), also listed in Annex A. The restructuring of
the Ukravtodor Eurobonds will be on the same terms as the Restructuring.
************************
This announcement is made by the Government and constitutes a public
disclosure of inside information under Regulation (EU) 596/2014 (16 April
2014).
Annex A
Eurobonds
Instrument Coupon Maturity
USD 912 m 7.75% notes 7.75% Sep-24
USD 1.355bn 7.75% notes 7.75% Sep-25
USD 750m 8.994% notes 8.994% Feb-26
USD 1.34bn 7.75% notes 7.75% Sep-26
USD 1.33bn 7.75% notes 7.75% Sep-27
EUR 1bn 6.75% notes 6.75% Jun-28
USD 1.32bn 7.75% notes 7.75% Sep-28
USD 1.31bn 7.75% notes 7.75% Sep-29
USD 1.6bn 9.75% notes 9.75% Nov-30
USD 1.75bn 6.876% notes 6.876% May-31
EUR 1.25bn 4.375% notes 4.375% Jan-32
USD 3bn 7.375% notes 7.375% Sep-34
USD 2.6bn 7.253% notes 7.253% Mar-35
State Agency for Restoration and Development of Infrastructure ("Ukravtodor")
Eurobonds
USD 700m 6.25% notes 6.25% 2030
Annex B
Principal Financial Terms
(applicable to the Eurobonds and the Ukravtodor Eurobonds)
Consent Fee Only those bondholders who tender their Eurobonds in the exchange offer on or
before the early consent deadline shall be entitled to receive the Consent
Fee. Early Consent Deadline to be agreed.
Consent fee shall be calculated as 1.25% of the outstanding principal amount
of Eurobonds calculated on a per note basis of Eurobonds that are exchanged.
Shall be payable to eligible bondholders in cash in USD 1 (#_ftn1) on the
date of the settlement of the exchange.
Bond A · Principal: 40% of outstanding principal amount of Eurobonds plus past
due and accrued interest up to 1 August 2024 ("Aggregate Bond A")
· Currency: USD(1)
· Coupon Structure:
o Coupons to start accruing from 1 August 2024 and to be paid in cash
semi-annually in arrears on 1 February and 1 August
o Payment dates on or before 1 August 2025: 1.75% p.a.
o Payment dates from 1 February 2026 to 1 February 2027: 4.5% p.a.
o Payment dates from 1 August 2027 to 1 August 2033: 6% p.a.
o Payment dates from 1 February 2034 onwards: 7.75% p.a.
Bond A series as a percentage of Aggregate Bond A
· Series due 1 February 2029 : 12.5%
· Series due 1 February 2034: 32.5%
· Series due 1 February 2035: 30%
· Series due 1 February 2036: 25%
Bond B · Principal: 23% of outstanding principal amount of Eurobonds plus past
due and accrued interest up to and including 1 August 2024 ("Aggregate Bond
B")
· Currency: USD(1)
· Coupon Structure:
o Coupons to start accruing from 1 August 2024 and to be paid in cash
semi-annually in arrears on 1 February and 1 August
o Payment dates on or before 1 February 2027: nil
o Payment dates from 1 August 2027 to 1 August 2033: 3%
o Payment dates from 1 February 2034 onwards: 7.75%
Bond B Series as a percentage of Aggregate Bond B
· Series due 1 February 2030: 9.5%
· Series due 1 February 2034: 35.5%
· Series due 1 February 2035: 30%
· Series due 1 February 2036: 25%
Non-consenting holders would not receive series 2035 and 2036, and unissued
additional Bond Bs would not be reallocated to consenting holders
Contingent Bonds B · Additional Bond B principal (2035 and 2036 series above) to be issued
by Ukraine as set out below on the Principal Increase Date if the Principal
Increase Condition has been met.
· Principal Increase Date: 15 November 2029
· Principal Increase Condition: FY 2028 nominal GDP is at least 3%
above FY 2028 nominal GDP projected by the IMF under the Baseline Scenario
under the Fourth Review of the extended arrangement under the Extended Fund
Facility for Ukraine dated 28 June 2024, AND, FY 2028 real GDP is at least
equal to FY 2028 real GDP projected by the IMF under the Baseline Scenario
under the Fourth Review of the extended arrangement under the Extended Fund
Facility for Ukraine dated 28 June 2024
· Principal Increase Amount:
o Up to an additional 12% of outstanding principal amount of Eurobonds plus
past due and accrued interest up to 1 August 2024 to be issued as additional
Bond B
o Maximum issuance of the full 12% under scenarios where FY 2028 nominal GDP
outperforms IMF Baseline by 7.5% or more (in the scenario where 2028 UAH/USD
FX rate materializes as forecasted by the IMF under the Baseline Scenario
under the Fourth Review of the extended arrangement under the Extended Fund
Facility for Ukraine dated 28 June 2024)
· Principal Increase Amount calculation:
(2028A nominal GDP in UAH - 2028 Projected Nominal GDP in UAH * 1.03) * 27.87%
/ Average 2028 UAH /USD FX rate
· Source : IMF October 2029 World Economic Outlook
Annex C
Principal Non-Financial Terms
Structure of Transaction and Allocation of New Securities The debt restructuring will be consummated through an exchange offer (and
associated consent solicitation) (the "Transaction") open to all eligible
holders of Eurobonds. Ukraine will offer to exchange the Eurobonds for four
series of A Bonds and four series of B Bonds.
At settlement, participating holders of Eurobonds will receive an allocation
of the various series of A Bonds and B Bonds pursuant to a schedule designed
to recognise the different maturities and coupon levels across the Eurobonds.
Documentation and Implementation Ukraine will consult with the Committee and its advisors on the documentation
necessary to facilitate the Transaction, including the exchange offer and
consent solicitation memorandum and the terms and conditions of the A Bonds
and B Bonds.
The terms and structure of the Transaction and of the related documentation
will be designed to encourage the participation and consent of holders of
Eurobonds through use of collective action clauses and inclusion of
appropriate incentives.
Appropriate information undertakings by Ukraine and bondholder
remedies/protections to support contingent features in the B Bonds to be
included in the definitive documentation.
Loss Reinstatement In the event a further restructuring of A Bonds and B Bonds is required at the
time of a restructuring of Ukraine's official sector claims (as anticipated by
the current IMF programme) by reason of the application of comparability of
treatment considerations, loss reinstatement provisions embedded in the terms
of the A Bonds and B Bonds shall have the commercial effect of reinstating the
original (pre-2022 restructuring) claim of bondholders plus accrued and unpaid
interest thereon up to the date of the further debt treatment less the
aggregate amount of interest paid on the A Bonds and B Bonds up to the date of
the further restructuring.
Exchange documentation to include a description of commitment of the Group of
Creditors of Ukraine ("GCU") to provide future debt relief to Ukraine to
ensure debt sustainability, as well as the GCU's approach to comparability of
treatment in case a further restructuring of A Bonds and B Bonds is required.
Most Favoured Creditor Clause Documentation of A Bonds and B Bonds to include a market standard most
favoured creditor clause. Terms to be agreed.
Treatment of Warrants With respect to Ukraine's outstanding GDP-linked Securities ("Warrants"):
a. Ukraine intends to make the payment of the deferred consent fee which
formed part of the 2022 consent solicitation in relation to the Warrants and
the deferred 2021 reference payment.
b. Ukraine will commit to ensure the fair and equitable treatment of
holders of the Warrants in any prospective future liability management or
other treatment proposal contemplated in the context of the IMF programme.
c. The A Bonds and B Bonds will have no events of default related to or
referencing the Warrants.
The exchange documentation will provide a mechanism for payment or
reimbursement of all reasonable fees, costs and expenses (including advisor
Ad Hoc Creditor Committee adviser's fees fees and expenses) of the Committee on mutually satisfactory terms and in line
with market standard by way of allocation of budgeted but unpaid consent fees,
deduction of such fees from the first coupon payment on the A Bonds or
otherwise.
***
This press release does not constitute an offer of the new securities for sale
in the United States, and the new securities (if issued) will not be
registered under the U.S. Securities Act of 1933, as amended (the "Securities
Act") or the securities laws of any state of the United States and they may
not be offered or sold within the United States, except pursuant to an
exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act and applicable state or local securities
laws. This press release does not constitute an offer of the new securities
for sale, or the solicitation of an offer to buy any securities, in any state
or other jurisdiction in which any offer, solicitation or sale (if made) would
be unlawful. Any person considering making an investment decision relating to
any securities must inform itself independently based solely on an offering
memorandum to be provided to eligible investors in the future in connection
with any such securities before taking any such investment decision.
This announcement is directed only to beneficial owners of the Eurobonds who
are (A) "qualified institutional buyers" within the meaning of Rule 144A under
the Securities Act or (B) outside the United States in offshore transactions
in compliance with Regulation S under the Securities Act, that may lawfully
participate in the Transaction in compliance with applicable laws of
applicable jurisdictions.
No offer of any kind is being made to any beneficial owner of Eurobonds who
does not meet the above criteria or any other beneficial owner located in a
jurisdiction where the offer would not be permitted by law.
Forward-Looking Statements
All statements in this press release, other than statements of historical
fact, are forward-looking statements. These statements are based on
expectations and assumptions on the date of this press release and are subject
to numerous risks and uncertainties which could cause actual results to differ
materially from those described in the forward-looking statements. Risks and
uncertainties include, but are not limited to, market conditions and factors
over which Ukraine has no control. Ukraine assumes no obligation to update
these forward-looking statements and does not intend to do so, unless
otherwise required by law.
Notice to Investors in the European Economic Area and the United Kingdom
Notice to EEA retail investors. The announcement contained in this press
release is not being directed to any retail investors in the European Economic
Area ("EEA") or in the United Kingdom. As a result, no "offer" of new
securities is being made to retail investors in the EEA or in the United
Kingdom.
This announcement is only directed to beneficial owners of Eurobonds who are
(i) within a Member State of the European Economic Area if they are "qualified
investors" as defined in Regulation (EU) 2017/1129 and (ii) within the United
Kingdom they are "qualified investors" as defined in Regulation (EU) 2017/1129
as it forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018, as amended ("EUWA").
The new securities are not intended to be offered, sold or otherwise made
available to and should not be offered, sold or otherwise made available to
any retail investor in the EEA. For these purposes, a "retail investor" means
a person who is one (or more) of: (i) a retail client as defined in point (11)
of Article 4(1) of Directive 2014/65/EU (as amended, "MiFID II"); or (ii) a
customer within the meaning of Directive (EU) 2016/97 (as amended), where that
customer would not qualify as a professional client as defined in point (10)
of Article 4(1) of MiFID II.
The new securities are not intended to be offered, sold or otherwise made
available to and should not be offered, sold or otherwise made available to
any retail investor in the United Kingdom. For these purposes, a "retail
investor" means a person who is one (or more) of: (i) a retail client as
defined in point (8) of Article 2 of Regulation (EU) No 2017/565 as it forms
part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018,
as amended; and/or (ii) a customer within the meaning of the provisions of the
Financial Services and Markets Act 2000 (the "FSMA") and any rules or
regulations made under the FSMA to implement Directive (EU) 2016/97, where
that customer would not qualify as a professional client, as defined in point
(8) of Article 2(1) of Regulation (EU) No 600/2014 as it forms part of UK
domestic law by virtue of the EUWA.
Consequently no key information document required by Regulation (EU) No
1286/2014 (as amended, the "EU PRIIPs Regulation") or by Regulation (EU) No
1286/2014 as it forms part of UK domestic law by virtue of the EUWA (as
amended, the "UK PRIIPS Regulation") for offering or selling the new
securities or otherwise making them available to retail investors in the EEA
or the United Kingdom has been prepared and therefore offering or selling the
new securities or otherwise making them available to any retail investor in
the EEA or the United Kingdom may be unlawful under the EU PRIIPs Regulation
and the UK PRIIPs Regulation.
United Kingdom
For the purposes of section 21 of the Financial Services and Markets Act 2000,
to the extent that this announcement constitutes an invitation or inducement
to engage in investment activity, such communication falls within Article 34
of the Financial Services and Markets Act 2000 (Financial Promotion) Order
2005 (as amended, the "Financial Promotion Order"), being a non-real time
communication communicated by and relating only to controlled investments
issued, or to be issued, by Ukraine.
Other than with respect to distributions by Ukraine, this announcement is for
distribution only to persons who (i) are outside the United Kingdom, (ii) have
professional experience in matters relating to investments falling within
Article 19(5) of the Financial Promotion Order, (iii) are persons falling
within Article 49(2)(a) to (d) ("high net worth companies, unincorporated
associations etc.") of the Financial Promotion Order, or (iv) are persons to
whom an invitation or inducement to engage in investment activity (within the
meaning of section 21 of the Financial Services and Markets Act 2000) in
connection with the issue or sale of any securities may otherwise lawfully be
communicated or caused to be communicated (all such persons together being
referred to as "relevant persons"). This announcement is directed only at
relevant persons and must not be acted on or relied on by persons who are not
relevant persons. Any investment or investment activity to which the
announcement relates is available only to relevant persons and will be engaged
in only with relevant persons.
1 Euro-denominated Eurobonds to be converted in USD using the average
USD/EUR exchange rate for the 30-day period prior to 1 August 2024
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END STRQKBBKOBKKPOBRecent news on PJT Partners
See all newsREG - General Atlantic Svc Learning Technol.Grp - Update on Equity Syndication
AnnouncementREG - Co-Op. Bank Hldgs Co-Operative Bank Coventry BuildingSoc - Announcement of Completion
AnnouncementREG - Coventry BuildingSoc Co-Op. Bank Hldgs - Announcement of Completion
AnnouncementREG - Coventry BuildingSoc Co-Op. Bank Hldgs - Announcement of Regulatory Approval
AnnouncementREG - Co-Op. Bank Hldgs Co-Operative Bank Coventry BuildingSoc Coventry Bldg Soc. - Regulatory Approval and Timetable Update
Announcement