: :inin Kyiv (EET)

PrivatBank issues almost $600 mln worth of debt participation notes

Ukraine`s largest bank PrivatBank, which was nationalized in accordance with the decision of the Cabinet of Ministers, has replaced bonded obligations for $595 million to the SPV (UK) for loan participation notes, the NBU said in a notification for PrivatBank noteholders.

According to the notification, PrivatBank had the following notes in issue: $175 million 10.875% Loan Participation Notes due 28.02.2018 (the ”$175m Senior Notes”); $200 million 10.25% Loan Participation Notes due 23.01.2018 (the ”$200m Senior Notes” and, together with the $175m Senior Bonds, the ”Senior Notes”); and $220 million 11% Loan Participation Notes due 2021 (the ”Subordinated Notes”).

The Notes are issued by an SPV established in the UK which has on-lent the proceeds of the issue of the Notes to PrivatBank under four loan agreements (the ”Loan Agreements”) (one each for the Senior Notes and two subordinated loans for the Subordinated Notes). These loans are separately secured by the SPV in favor of the relevant trustee appointed in respect of the applicable Notes by way of assignment and charge for the benefit of the trustee and the holders of the relevant Notes.

”Article 41.1 of the Law of Ukraine on Households Deposit Guarantee System (”Article 41.1”) provides for the resolution of a regulated bank by appointment of a temporary administrator, the bail-in of certain liabilities and the nationalization of the bank. Pursuant to the exercise of Article 41.1 in respect of PrivatBank, each of the loans represented by the loan agreements were bailed-in during the temporary administration of PrivatBank. The nationalization of PrivatBank (at which point the temporary administration of PrivatBank ceased) has also occurred on 21 December 2016. Payments under each series of Notes are made on a limited recourse basis to the extent that principal, interest or other amounts are received by the issuer of the Notes under the relevant Loan Agreement and as such where no payments are made under the Loan Agreements following bail-in, no payments will be made under each series of Notes. Further detail will be announced in due course,” the NBU said.


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