Bank of England recognition of Privatbank bonds bail-in cannot be challenged any more

The three-month period has passed since the Bank of
England moved to recognize the bail-in of Privatbank’s Eurobonds, and no one has
sought to challenge it in English courts, Privatbank reported on Aug. 30. As a
result, the decision of the Bank of England “is now final and unassailable”,
the bank said.

Recall, Privatbank was recognized insolvent and
nationalized in December 2016. Before the nationalization, the government
bailed-in some of the bank’s obligations, including all its Eurobonds for USD
555 mln then outstanding. The holders of two senior Eurobonds (for USD 335 mln)
challenged the bail-in in U.K. courts and reached some success there. However,
in May 2021, the Bank of England decided to recognizethe bail-in under U.K law, which allows Privatbank to avoid payments under the
bonds, based on the adopted court rulings.

Alexander Paraschiy: This is another victory for Privatbank that leaves still fewer
opportunities for bondholders to claim bond repayments or compensations.
However, it is likely that the bondholders will continue searching for
alternate routes to make good on their demands for compensation, while this
saga could last for many years.