Privatbank vows better 2015 bond if extension approved on Aug. 13

Ukraine’s leading lender Privatabnk (PRBANK) promised to offer slightly improved restructuring parameters of its USD 200 mln Eurobond maturing on Sept. 23, 2015, if its holders vote at their Thursday meeting to extend the bond’s maturity to Dec. 1, 2015. Recall, on July 29, the bank asked for a ten-week maturity extension to acquire some time to persuade the holders of its two nearest Eurobonds to simultaneously approve their restructuring. At their July 13 meeting, the holders of the 2015 notes accepted the first restructuring offer, but the holders of Feb. 2016 notes did not, which resulted in the failure of the votes at both meetings.

To increase the chance that the holders of the 2015 notes will approve a ten-week maturity extension on Aug. 13, Privatbank promised, in case of a positive vote, to later improve some of restructuring conditions as compared to its first offer made ahead of July 13 meeting.

In line with the first offer, the bank intends to grant a 2% consent fee. It will again ask for an extension of the ultimate maturity of the 2015 bond to Jan. 23, 2018, with 30% of the principal to be repaid on Sept. 23, 2017.

Unlike the first offer, when the rest of the principal (70%) was scheduled to be repaid on Jan. 23, 2018, a new offer will stipulate four monthly repayments of 17.5% between Oct. 23, 2017 and Jan. 23, 2018. Another improvement that the bank is promising is an increased coupon rate to 10.25% (up from the current 9.38%, and up from the first offer of 10.00%).

Alexander Paraschiy: This is what the holders of the 2015 notes needed in order to approve the 10-week postponement. As the holders have already accepted the first restructuring terms, and they are promised to be offered even softer terms in the near future, we see a high likelihood that the Aug. 13 vote will be successful.

This, however, does not eliminate the risk that Privatbank won’t be able to find common ground with the holders of its 2016 notes (and other parties like the central bank and the IMF, which seem to control this process) by Dec. 1. If it doesn't, the bank might have to offer a new postponement of the 2015 notes and a new improvement in their restructuring parameters.

The offered postponement and promised restructuring parameters of the 2015 notes (assuming the restructuring is completed by Dec. 1, 2015) imply an of 31%, at the current price of 70% of par.

Источник: Конкорд Капитал