19 Sep 2023 10:06

Gazprom may pay Eurobond holders not participating in swap through payment agent

MOSCOW. Sept 19 (Interfax) - Gazprom can pay holders of Eurobonds who are not participating in the exchange of their bonds for replacement bonds in line with issuing documents, meaning through a payment agent, the Russian gas giant indicated in a statement released on the disclosure wire.

The company said it has received permission from the government commission for control over foreign investment to fulfil obligations on Eurobonds without complying with several points of the presidential decree that regulates payments to Russian holders of Eurobonds.

These are provisions stipulating that borrowers with outstanding Eurobonds must place replacement bonds by the end of 2023, but before replacement they must meet obligations to investors who hold bonds through Russian depositories by transferring money according to the procedure determined by the Central Bank's board of directors, which calls for direct payments to Russian bondholders. Obligations to investors with bonds in Russian depositories who did not acquire replacement bonds in the course of their placement must be fulfilled the same way.

Gazprom has been exempted from these provisions, so the company can make all payments on unreplaced Eurobonds in line with issuing documentation, meaning by transferring funds to a payment agent for subsequent distribution to bondholders, without making separate payments to holders in Russian and foreign infrastructure. This applies to Eurobonds issued by Gaz Capital S.A. and Gaz Finance Plc.

"In accordance with Decree 430, PJSC Gazprom is fulfilling obligations related to Eurobonds by exchanging them for the replacement bonds of its subsidiary Gazprom Capital LLC. Payments to holders of Eurobonds who did not exchange them are being made in accordance with the credit issuing documentation on the Eurobonds," the company said.

Gazprom has partially replaced all outstanding Eurobond issues with local bonds, and the company's replacement bonds now make up most of market for these instruments.

The company began second rounds of Eurobond replacements in March. Since then, additional placements have been made of dollar-denominated issues maturing in March and June 2027, an issue in British pounds maturing in 2024, an issue in Swiss francs maturing in 2027, and dollar issues maturing in 2026, 2028, 2030, 2031, 2034 and 2037. On Monday, the company began a second round of replacement of euro-denominated Eurobonds maturing in November 2023.