Ukraine announced a four-day extension – until 5:00 p.m. New York time on August 27 – of the deadline for early consent to the exchange of Eurobonds within the framework of their restructuring, which provides holders with the most favorable conditions.
“Ukraine understands that some Holders may encounter technical problems when transmitting their participation instructions through their custodians and clearing systems, which may affect the timely transmission of such participation instructions before the early consent deadline,” the Ministry of Finance said in a stock exchange announcement in Friday
It is noted that the extension period was chosen on the basis of information received from such owners of Eurobonds.
At the same time, it is noted that the settlement date remains unchanged and is expected to occur on or around August 30, 2024.
In turn, the special committee of creditors of Eurobond owners also distributed a message on Friday supporting Ukraine’s decision to extend the early consent period.
“By providing the holders of the relevant bonds with additional time, the Committee believes that this will help maximize participation and, therefore, increase the likelihood of success of the (exchange) proposal,” the committee said in a statement.
Voluntary participation in the exchange and submission of applications during the early consent period enables Eurobond holders to receive 1.25% additional cash reward, as well as new series “B” bonds for 12.65% of the amount of Eurobonds.
The initial proposal of the Ministry of Finance regarding the exchange provided for the participation in it only of owners of 100 bonds with a denomination of $1,000, but later it was relaxed. “Thanks to the timely response of the National Securities and Stock Market Commission (NCSCFR) and coordinated actions with the National Bank, the Ministry of Finance of Ukraine on August 16, 2024, additional information (clarification) was sent to depository institutions regarding the voting procedure for the corporate event on the exchange of OVDP for other securities and funds”, – noted the NKCPFR.
The regulator specified that the problem regarding the lot of securities packages was leveled, an additional time limit was provided for the approval of orders, as well as the possibility of aggregated voting.
According to the estimates of Taras Kozak, the founder of the Univer investment group, for Forbes Ukraine, the investments of Ukrainian individuals in Eurobonds of Ukraine amount to approximately $20 million, in particular, his company has approximately 500 such clients, and approximately 260 of them remain after a series of deals.
As reported, Ukraine announced on July 22 that it had reached an agreement in principle on the restructuring of Eurobond debt in the amount of about $23 billion with a special committee of the owners of these Eurobonds.
The arrangements provide for the write-off of 37% of the debt with the possibility of recovery of 12% in case of reaching a certain level of GDP in 2028. The rest of the debt will be covered by new Eurobonds maturing in 2029-2036, the interest on which will gradually increase from 1.75% in the coming years to 7.75% at the end of the term. For voluntary participation in such an exchange, a fee of 1.25% of the amount of Eurobonds being exchanged will be paid.
In order for the transaction to take place, the consent of 2/3 of the holders of all securities and at least half of the holders of each of the issues will be sufficient, provided that less than a quarter of the holders of each issue are against such transaction.
