Oschadbank to offer bond restructuring with 7Y extension, higher coupon

Ukraine’s State Savings Bank (Oschadbank, OSCHAD) reported on June 12 it reached an agreement with an ad hoc committee to restructure its Eurobonds on very similar conditions to what was earlier offered by its peer Ukreximbank. The restructuring will consist of a maturity extension for seven years with amortized repayment of the principal and increased coupon. The agreed-upon parameters are subject to approval by bondholder meetings that have yet to be scheduled.

The bank seeks to exchange its USD 700 mln in 2016 Eurobonds for new 2023 notes, with repayment of 60% of principal with a three-year delay (Mar. 10, 2019) and the rest to be repaid in eight semi-annual payments between Sept. 10, 2019 and Mar. 10, 2023. The coupon rate for the notes is proposed to increase to 9.375% (from 8.250%).

The bank’s USD 500 mln in 2018 bonds are offered to be exchanged for new 2025 notes, with 50% of principal to be paid with a two-year delay (Mar. 20, 2020) and the rest to be repaid in ten semi-annual payments between Sept. 20, 2020 and Mar. 20, 2025. The coupon rate for the notes is proposed to increase to 9.625% (from 8.825%).

The bank also will offer an option for the holders of 2016 (2018) notes to exchange them for new 2025 (2023) notes. The holders of 2016 notes can exchange their paper for 2025 notes for a total amount that does not exceed the offered demand of holders of 2018 notes for 2023 notes plus USD 200 mln. The holders of 2018 notes can exchange their paper for 2023 notes for a total amount that does not exceed the offered demand of holders of 2018 notes for 2023 notes.

Alexander Paraschiy: The yield to extended maturity of Oschadbank’s 2016 and 2018 bonds is 18.2% and 16.9%, respectively, assuming they will be successfully exchanged for 2023 and 2025 notes. This is a slightly better return as compared to what’s being offered currently for the bonds of Ukreximbank, at the current prices. For that reason, we expect the bonds of Oschadbank will appreciate today.

Источник: Конкорд Капитал