Ukraine offers 7Ύ% notes due 2019-2027 in exchange for 14 bond series

By Susanna Moon

Chicago, Nov. 12 – Ukraine said it has set the exchange offer amounts for 14 bond series at the rate of $1,074 for each €1,000.

The total principal amount of new notes and notional amount of the GDP-linked securities is as follows, according to a government notice:

• $1,154,939,000 of 7Ύ% notes due 2019;

• $1,530,997,000 of 7Ύ% notes due 2020;

• $1,377,761,000 of Ύ% notes due 2021;

• $1,354,820,000 of 7Ύ% notes due 2022;

• $1,330,114,000 of 7Ύ% notes due 2023;

• $1,315,072,000 of 7Ύ% notes due 2024;

• $1,306,032,000 of 7Ύ% notes due 2025;

• $1,295,404,000 of 7Ύ% notes due 2026;

• $1,286,228,000 of 7Ύ% notes due 2027; and

• $2,916,421,000 of GDP-linked securities.

As previously announced, Ukraine is offering to exchange the following 14 note series:

• $500 million 6 7/8% bonds due 2015;

• $1.5 billion 7Ύ% bonds due 2020.

• $1.25 billion 7½% bonds due 2023; and

• $700 million 6Ύ% bonds due 2017;

• $1 billion 6.58% bonds due 2016;

• $2.25 billion 7.8% bonds due 2022;

• $1.25 billion 6Ό% bonds due 2016;

• $2.6 billion 9Ό% bonds due 2017;

• $1.5 billion 7.95% bonds due 2021;

• €600 million 4.95% bonds due 2015;

• $550 million 9% guaranteed bonds due 2017;

• $690 million 7.4% guaranteed bonds due 2018;

• $568 million 8 3/8% guaranteed bonds due 2017; and

• $3 billion 5% bonds due 2015.

More background

Ukraine said on Oct. 30 that the conditions to the restructuring of 13 series of sovereign and sovereign-guaranteed bonds had been satisfied, with a settlement date of Nov. 12.

As previously reported, Ukraine received approval to restructure the bonds at bondholder meetings held Oct. 14 in London.

A meeting for a 14th series of bonds, Ukraine’s $3 billion 5% bonds due 2015, had been adjourned for lack of a quorum, and a new meeting was scheduled for Oct. 29 in London.

The restructuring is being carried out via an exchange offer. Holders who exchange will receive new bonds and gross domestic product-linked securities in exchange for their existing bonds.

The main features of the restructuring include the following:

• Exchanging bondholders will experience a 20% nominal haircut;

• The exchanged bonds will be rolled into nine new bonds, with principal payments rescheduled to fall outside of the 2015 to 2018 program period. Principal will instead be repaid in nine equal amounts from 2019 to 2027;

• All nine series will have a coupon of 7Ύ%, representing an increase of 50 basis points compared to the blended average under current contractual agreements; and

• The GDP-linked securities will provide potential upside to holders from 2021 to 2040. Specifically, the payment will be zero if real GDP growth is below 3%, 15% of the value of any GDP growth between 3% and 4% and 40% of the value of any GDP growth above 4%. Payments for years 2021 to 2025 will be capped at 1% of GDP for each year, and no payments will be made unless nominal GDP is higher than $125.4 billion.

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