Rusal passes resolution to amend 4.85% notes due 2023

By William Gullotti

Buffalo, N.Y., Jan. 11 – Russia’s United Co. Rusal plc passed the extraordinary resolution to amend its $500 million 4.85% guaranteed notes due February 2023 (ISIN: XS1759468967), according to an announcement on Wednesday.

As previously reported, the initial resolution included Rusal’s $500 million 5.3% guaranteed notes due May 2023 (ISIN: XS1577964965), which passed at the Dec. 22 meeting.

Due to lack of quorum, the meeting for the February-maturing notes was adjourned to 11 a.m. ET on Jan. 10 via teleconference.

Proposal

The company proposed to introduce an alternative payment mechanism and to waive any actual or potential breaches and any cross-default that might occur due to payments made under the alternative payment mechanism.

The issuer did not offer any consent fee.

Background

There is a coupon and principal payment under the February 2023 notes due on Feb. 1 and a coupon and principal payment under the May 2023 notes due on May 3, 2023.

In light of sanctions against Russia and Russian companies and individuals and restrictions with respect to securities of Russian issuers introduced by European central securities depositories – although neither the issuer nor any of the guarantors is a sanctions restricted person – there exists a risk that the coupon and the principal amount under both series of 2023 notes received from the issuer or the guarantors by the principal paying agent can be blocked, delayed or frozen and that, consequently, those funds will not be distributed among the noteholders, the company explained.

In turn, the Russian authorities have introduced some currency restrictions aimed at restricting the outflow of foreign currency from Russia and imposed a number of restrictions on transacting with non-Russian counterparts.

Earlier this year the company successfully obtained the consent of the noteholders to pay the coupon under the February 2023 notes due Aug. 1 and the coupon under the May 2023 notes due Nov. 3 in accordance with a mechanism similar to the alternative payment mechanism currently proposed.

Given this, in order to ensure the equal treatment of all noteholders to receive the February 2023 and May 2023 notes payments, the punctuality of the payments and the protection of the rights and interests of the noteholders, the company is conducting the current consent solicitation.

Details

Copies of the consent solicitation memorandum can be obtained by registering on the website https://www.i2capmark.com/event-details/ 63/Holder/rusal-capital-dac.

Holders of record as of Dec. 13 are eligible to participate.

i2 Capital Markets (rusal@i2capmark.com) is the information and tabulation agent.

Rusal is a Moscow-based aluminum company.

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