Ukraine extends deadline for early consent to Eurobond exchange

MOSCOW. Aug 26 (Interfax) - Ukraine has announced a four-day extension, until 5:00 p.m. New York time on August 27, for early consent to the exchange of its Eurobonds as part of a debt restructuring, which gives bondholders the most favorable terms.

"Ukraine understands that some holders may encounter technical problems in transmitting their participation instructions through their custodians and clearing systems, which may affect the timely transmission [...] before the early consent deadline," Ukrainian media reported the Finance Ministry as saying in an exchange filing. It indicated that the extension period was chosen based on information received from bondholders.

The date for settlements remains unchanged and is expected to be "on or around August 30," the ministry said.

Voluntary participation in the bond swap and filing instructions by the early consent period enables Eurobond holders to receive an additional 1.25% fee and new series "B" bonds for 12.65% of the Eurobond amount.

The Finance Ministry's initial exchange offer proposed that only holders of upwards of 100 bonds with face value of $1,000 would participate, but the terms were later eased.

Ukraine announced on July 22 that it had reached agreement in principle on restructuring with an ad hoc committee of holders of its Eurobonds totaling about $23 billion that calls for writing off 37% of the debt with the possibility of restoring 12% if the country reaches a certain GDP level in 2028.

For the remaining debt, Ukraine will issue new Eurobonds maturing in 2029-2036 with a yield that will gradually grow from 1.75% in the next few years to 7.75% at the end of the term. Payment for consent will be 1.25% of the amount of bonds being exchanged.

Under the conditions of the exchange offer and consent solicitation that Ukraine published on August 9, the deadline for bondholders to submit instructions to participate in the exchange is August 27, the results will be announced on August 28 and all settlements will be made on August 30 and the subsequent five days.

In order to go ahead, the exchange requires the consent of two thirds of all bondholders and at least half of the holders of each issue, on the condition that less than a quarter of holders of each issue are opposed to such consent.

Ukraine initially expected to conclude all negotiations with bondholders by August 1, the deadline for payments under the terms of a 2022 restructuring.