Alfa Bank Ukraine gets approval for Eurobond swaps

Ukraine Issuance, the firm issuing new Eurobonds for Alfa Bank Ukraine, announced yesterday that it has secured the approval of the holders of Alfa’s 2009, 2010 and 2011 Eurobonds to swap the three issues for new Eurobonds maturing on July 30, 2012. Ukraine Issuance said the total volume of the bonds to be placed will be USD 840.6 mln. The bonds are to be repaid in equal parts beginning in the second year of circulation and have a quarterly coupon. The transaction is expected to be completed by August 5. Andriy Gostik: This move finalizes the process of restructuring the bank’s obligations on Eurobonds. In our view, based on this and taking into account the issuer’s inherent risks, a fair YTM for the 2012 notes should be around 40%, corresponding to a price of ~68. We recommend buying into Alfa’s new Eurobonds below this level.