SIBUR to make Eurobond payments via special ruble accounts, refuse payments via payment agent

MOSCOW. May 11 (Interfax) - SIBUR will make payments on its Eurobonds using D-type special ruble accounts, and will refuse to transfer funds through a payment agent, the issuing company Sibur Securities DAC said.

Some of the previous payments on Eurobonds made by the company to the payment agent, Citibank, N.A., London Branch, for further distribution to holders, did not reach investors for reasons beyond the control of the issuer or guarantors, the report says.

The issuer is deeply concerned that any payments made to the main payment agent may not reach the holders of the Eurobonds, the company notes. In order to protect the interests of investors and to minimize the risks associated with the uncertainty of the operation of international clearing and settlement systems, the company will not make payments through a payment agent until it receives assurances that they will be processed immediately, Sibur Securities DAC said.

In order to ensure the proper fulfillment of Eurobond obligations, SIBUR decided to organize payments using special D-type ruble accounts provided for by the Russian President's decree dated August 8, 2022.

The August decree provides for the possibility of opening D-type accounts by Russian legal entities holding Eurobonds in order to make ruble payments to non-residents or residents whose rights to Eurobonds are accounted for by foreign depositories. The document provides that a non-resident will be able to convert rubles from a type D account into foreign currency and transfer these funds to a bank account, including one opened with a foreign bank, without obtaining special permits.

Since July last year, SIBUR has been making separate payments on Eurobonds to holders whose rights are taken into account by Russian and foreign depositories. The company was the first to make a split payment to comply with the requirements of the July 5 presidential decree, which obliges companies to bring Eurobond payments to their Russian holders (this can be done through a split payment or the issuance of local "substitute" bonds).

The company then reported problems with bringing in part of the coupon payment intended for holders in foreign infrastructure, and even added funds to pay the July coupon.

In total, SIBUR has three issues of dollar-denominated Eurobonds in circulation - these are debt securities maturing in 2023, 2024 and 2025.