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Ukraine completes search consultants to protect their interests to the holders of Eurobonds of PrivatBank

Ukraine is close to completing the process of selecting legal and financial advisors to protect their interests to the holders of Eurobonds of PrivatBank (Dnepr) after the nationalization of financial institutions, announced the publication Debtwire.

Any additional information about the participants of the selection process in the message is missing.

As reported, the holders of Eurobonds of PrivatBank, owning different securities totaling more than $120 million, at the end of December 2016 has teamed up to a special Committee for joint protection of their rights and interests. The Committee is comprised of five funds, including the British, American and Swiss.

The holders intend to appeal to the London court of international arbitration (London Court of International Arbitration) compulsory exchange of their securities for shares of the additional issue of the Bank and thus expect to receive as compensation for his investment the foreign assets of the Bank.

The Trustee (the Trustee) at PrivatBank Eurobonds with maturity in 2018 Deutsche Trustee Company Limited 12 January 2017 published the notification about the lack of personal funds to investigate the forced conversion of obligations on the securities and the willingness to accept funds for the relevant procedures from their holders.

The notice also contained a letter that said the PrivatBank Eurobonds Issuer UK SPV Credit Finance plc. and the Trustee Deutsche Trustee Company Limited that became the property of the state without any obligations on the securities since they were decommissioned during the term of the interim administration.

As reported, in the framework of the nationalization of the PrivatBank’s obligation to a specially created British company (SPV) issuing of Eurobonds – have been subject to the procedure of bail-in and were exchanged for shares of the additional issue of the Bank.

Then the Fund of guaranteeing deposits of natural persons, which introduced a temporary administration in a financial institution, sold all of its shares to the state for 1 UAH. We are talking about three issues of Eurobonds: at $175 million at a rate 10,875%, maturing February 28, 2018, $200 million at a rate of 10.25% maturing on 23 January 2018, of which $40 million was repaid in August 2016 and $220 million at a rate of 11% (bonds and subordinated debt), maturing in 2021.

The Issuer of Eurobonds maturing in January and February of 2018 was made in the UK a special company (special purpose vehicle, SPV) UK SPV Credit Finance plc. Eurobonds maturing in 2021 were issued through ICBC Standard Bank Plc (Velikobritanija), however, during restructuring this debt was re-issued on UK SPV Credit Finance plc.

The terms of issue of Eurobonds maturing in 2018 assuming raised through placement of securities means the Issuer will provide to PrivatBank as debt. Securities have limited recourse.

The paper also noted that in the case of recognition of the Bank insolvent, it goes under management of Fund of guaranteeing deposits of natural persons. The Fund appoints temporary administrator of the Bank authorized to take any action to restore the solvency of the Bank.

The Agency “Interfax-Ukraine” failed to get comments from PrivatBank on the status of UK SPV Credit Finance plc after the nationalization of its parent structure and how converted into shares Eurobonds can be transferred to a UK SPV Credit Finance plc and, accordingly, distributed among the holders of the securities.

According to Sberbank Investment Research, trading systems continued to be settlement of transactions with all Eurobonds of PrivatBank.

According to Bloomberg, the quotations of Eurobonds maturing in January 2018 at the end of trading on 12 January 2017 decreased by 5.4 basis points (b.n.) – to 18,147% of face value. While their yield rose to 297,02% per annum. Quotations of Eurobonds maturing in February 2018 and February 2021 rose by 25 b. . p. to 17.5% and 12.5 b. p. up to 12,875% of face value, respectively. Their yield declined to 274,948% per annum and 107,208% per annum respectively.

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