30 Sep 2009 17:52

Naftogaz to pay Eurobonds coupon, but not principal

KYIV. Sept 30 (Interfax) - Ukrainian national oil and gas company Naftogaz Ukrainy, which has $500 million in Eurobonds maturing on Wednesday, will pay the final coupon on the bonds, but not the principal amount, Fuel and Energy Minister Yuriy Prodan told journalists on Wednesday.

"Naftogaz will pay the coupon before the end of the day, but not the $500 million," he said.

The coupon payment will total $20.3 million, based on the rate of 8.125% annually.

It was reported earlier that Naftogaz held restructuring talks with the bondholders on September 29. The negotiations are expected to continue on Wednesday.

Market watchers say that if Naftogaz pays the coupon, the Eurobond holders will hold off on filing suit over the late principal payment and will continue the negotiations.

Naftogaz on September 24 offered to exchange $500-million in Eurobonds maturing on September 30, 2009 for new bonds guaranteed by the state and maturing in 2014. The new bonds would have a coupon rate of 9.5% annually compared with 8.125% on the existing issue.

One condition Naftogaz Ukrainy plans for the exchange is that holders who accept the exchange before October 8 would receive new bonds equal to 100% of their holdings. In the second phase, until October 15, holders would receive 95%.

The Eurobond holders are scheduled to meet in London on October 19, 2009.

It was reported earlier that the $1.6 billion in debt that Naftogaz is seeking to restructure includes $220 million owed to Depha Bank, $550 million owed to Credit Suisse International (CSI), and $395.2 million owed to Deutsche Bank, which are due to be repaid in 2009-2012. Taking into account the Eurobonds and interest, the overall sum due to be paid is about $1.78 billion, including about $650 million due in 2009 and about $570 million in 2010.

The Luxembourg Stock Exchange Wednesday said on its web-site that it had de-listed the $500 million Naftogaz Eurobonds maturing September 30. The exchange did not give further comment.

The exchange suspended trading in the bonds for a while on September 24.