Naftogaz asks bond holders to defer payments by two years

MOSCOW. July 12 (Interfax) - Ukraine's Naftogaz has, via the issuer of its Eurobonds, Kondor Finance plc, asked the holders of almost $1.5 billion of bonds to consider deferring coupon payments on them by two years, including postponing the repayment of a $335 million issue of 2022 by the same period.

"In light of the protracted circumstances affecting Ukraine as a result of Russia's ongoing military intervention and its impact on Ukraine's energy security, the issuer, at the request of the borrower, has initiated this consent request in order to obtain the approval of the noteholders to facilitate the borrower's retention of available cash to support Ukraine's strategic priorities," according to a stock exchange filing.

Naftogaz has three Eurobond issues outstanding: $335 million of three-year bonds at 7.375% and 600 million euros of five-year bonds at 7.125%, both placed in July 2019 with the EBRD buying a fifth of the latter; and $500 million of seven-year bonds yielding 7.625% placed in November 2019. The $335 million issue matures on July 18.

Naftogaz proposes to pay all coupons on 2022 and 2024 Eurobonds on July 19, 2024 and redeem 2022 Eurobonds on the same day. The company would like to pay coupons on 2026 Eurobonds on November 8, 2024.