Privatbank subordinated Eurobond holders approve 5Y extension

Privatbank (PRBANK) got the approval of bondholders to restructure USD 150 mln in subordinated Eurobonds, the bank reported via a stock exchange announcement on Nov. 12. Over 98% of the participants of the scheme meeting held on Nov. 11 approved the deal. Now the deal should be approved by a court, which has a hearing scheduled for today in London.

The restructuring proposal included the bond’s maturity extension by five years to February 2021, and increase of its coupon rate to 11% (from 5.8% currently). The holders that accepted the offer before an early deadline on Nov. 9 are eligible to receive an early consent fee.

Alexander Paraschiy: We do not expect any problems with a favorable court ruling, so we consider this a done deal. The successful restructuring of the USD 150 mln bond has important implications for the holders of the USD 200 mln Eurobond, which initially matured in Sept. 2015. Based on the restructuring terms, the maturity of the USD 200 mln bond will be automatically extended to January 2018 from January 2016, as had been earlier agreed to by bondholders. All this means that Privatbank will not have to repay these two bonds (at a total value of USD 350 mln) in January-February 2016, which significantly improves its foreign currency liquidity.