Ukreximbank offers 7Y rescheduling, higher coupons on all its bonds

Ukraine’s State Export-Import Bank (Ukreximbank, EXIMUK) reported on May 26 it reached a preliminary agreement with some holders of its three Eurobonds to restructure them with seven-year maturity extensions and increased coupon rates. The holders of about 30% of all the Eurobonds of the bank supported the offered terms at a meeting in London on May 21, according to its release.

On the bank’s USD 750 mln notes due in July 27, 2015, the offer did not change from what was announced on April 20: a coupon rate increase to 9.625% (from 8.375%) and a maturity extension to April 27, 2022. The bond is offered to be repayable in seven tranches: 50% on April 27, 2019, and the rest in six 8.33% installments between October 2019 and April 2022.

The restructuring offer of Ukreximbank’s USD 125 mln notes due on Feb. 09, 2016 consists of a coupon increase to 6M LIBOR + 7% (about 7.42%, up from 5.79%) and a seven-year maturity extension with the first 50% repayment to be made in February 2020 and the other six 8.33% semi-annual repayments between August 2020 and February 2023. 

The restructuring offer of Ukreximbank’s USD 600 mln notes due on Jan. 22, 2018 consists of a coupon increase to 9.75% (up from 8.75%) and a seven-year maturity extension with first 50% repayment to be made in January 2021 and other eight 6.25% semi-annual repayments between July 2021 and January 2025.

The bank intends to launch a consent solicitation for its notes shortly so that new coupon rates will be valid since April 2015 for the 2015 notes, August 2015 for the 2016 notes and July 2015 for the 2018 notes.

Alexander Paraschiy: Now it’s clear that the earlier suggested restructuring terms of the bank’s 2015 notes served as a benchmark for all its other Eurobond restructuring. These terms might also serve as a benchmark for the terms of Eurobond restructuring that have yet to be offered by the bank’s closest peer, State Savings Bank of Ukraine (Oschadbank, OSCHAD).

If the offered restructuring terms are approved by bondholders, the existing Eurobonds of Ukreximbank will offer the following yields to their maturity at their current prices: 17.1% for the existing 2015 notes, 21.5% for the existing 2016 notes, and 17.7% for the existing 2018 notes. The implied yields look high enough for bondholders to accept the offers, in our view.