Global law firm White & Case LLP has advised Ukreximbank and Oschadbank, both state-owned Ukrainian financial institutions, on the successful reprofiling of their international capital markets indebtedness.
The Ukreximbank transaction consisted of the exchange of three series of loan participation notes issued by BIZ Finance plc; US$750 million 8.375 percent notes due 2015 for new 9.625 percent notes due 2022, US$125 million notes due 2016 for new floating rate notes due 2023 and US$600 million 8.75 percent notes due 2018 for new 9.75 percent notes due 2025.
The Oschadbank transaction consisted of the exchange of two series of loan participation notes issued by SSB No.1 plc; US$700 million 8.25 percent notes due 2016 for new 9.375 percent notes due 2023 and US$500 million 8.875 percent notes due 2018 for new 9.625 percent notes due 2025. The transaction also involved the amendment of the Oschadbank's US$100 million subordinated loan agreement, which included a change of structure from direct loan to loan participation notes issued by SSB No.1 plc.
The exchanges were implemented on terms which were initially agreed with ad hoc groups of noteholders and subsequently received the overwhelming support of noteholders across the various series of notes.
London-based White & Case partner Stuart Matty, Global Head of the Firm's Capital Markets Practice, led the team which advised both banks. He said: "The debt reprofilings of Ukreximbank and Oschadbank were unique in that they formed part of the wider International Monetary Fund's four-year US$17.5 billion Extended Fund Facility for Ukraine (EFF), which requires the government to decrease the repayments of its indebtedness in the programme period ending at the end of 2018 by approximately US$15 billion, which is still ongoing.
"What makes these reprofilings so interesting is that this is the first time ever that as part of a sovereign restructuring, the negotiations "looked through" the sovereign and required a reprofiling of state-owned companies, in the case of Ukreximbank and Oschadbank, necessitating a reprofiling of all of their international capital markets indebtedness that was due to be repaid prior to the end of the EFF Programme.
"The White & Case team, which included lawyers from a number of offices and practice areas, worked with the clients to execute these complex transactions against very tight deadlines and in a politically and economically challenging environment."
The White & Case team which advised Ukreximbank and Oschadbank was led by partner Stuart Matty (London) and included partners Doron Loewinger, Laura Prater, John Reynolds, John Higham (all London) and Owen Pell (New York), with support from counsel Pavel Boulatov (Moscow) and associates Martin Mojzis, Graeme Dickson, James Tanner, Joshua Van der Ploeg, James Clarke, Patrick Schumann, James Woolrich, Anna Hart (all London), Sonja Dünnwald (Frankfurt), Daria Vasilieva (Moscow), Mike Desimone, Jaroslav Kudrna and Richard Graham (all New York). The White & Case team worked closely with Lazard Frères, who acted as financial advisors to both Ukreximbank and Oschadbank.
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