Ukrzaliznytsia closes deal on having LPN payments deferred for 2 years
MOSCOW. Jan 30 (Interfax) - The Ukrainian state railway company Ukrzaliznytsia has formalized an agreement with the holders of two issues of loan participation notes (LPN) totaling nearly $895 million on deferring coupon and maturity payments by 24 months, thus finalizing their restructuring, Ukrainian media reported citing the company's statements on the Irish Stock Exchange on Friday.
In line with the deal, the maturity date of the 8.25% $594.9 million issue would be put back from July 9, 2024 until July 9, 2026 and that of the 7.87% $300 million issue from July 15, 2026 to July 15, 2028.
Coupon payments on each issue are made semi-annually. The deferred coupons will also continue accruing interest at the respective bond's coupon rate for the duration of the deferral period, at the end of which the deferred interest amounts will either be paid in cash partially or in full by Ukrzaliznytsia, or capitalized.
"The deferral of the Eurobond payments will lessen the pressure on the company's liquidity, which would subsequently provide more opportunities for restoring the infrastructure and increasing the railway transport's export potential. The implementation of the agreement would also help Ukrzaliznytsia to retain its reputation as a reliable borrower on financial markets and would facilitate future transactions on the capital market," Ukrainian Deputy Prime Minister for Reconstruction and Minister for the Development of Communities, Territories, and Infrastructure Alexander Kubrakov said in commenting on the agreement on social media.
Kubrakov described the deal as the first successful transaction involving foreign debt held by corporate borrowers and not backed by state guarantees since the start of the crisis. He thanked the bondholders for supporting Ukraine and his colleagues from the ministry, Ukrzaliznytsia, and the Finance Ministry for the result achieved.
As reported earlier, Ukrzaliznytsia last December reached agreement with the holders of $594.9 million and $300 million bond issues maturing in July 2024 and July 2026 respectively on deferring the payments by two years. Dragon Capital and JP Morgan acted as consultants and intermediaries in the deal. A consent fee was 0.5% of the face value.
According to the board's resolution, the company paid up to $5.738 million in fees to the bondholders and intermediaries.