Russia’s Gaz Capital gets holder OK to amend 5.338% notes at meeting

By Susanna Moon

Chicago, Aug. 13 – OJSC Gazprom said Gaz Capital SA secured the needed votes to amend its £500 million 5.338% loan participation notes due 2020 at a meeting held in London on Aug. 12.

There were enough holders to form a quorum, and the measure passed, according to a company notice.

Noteholders who delivered consents by the early consent deadline, 11 a.m. ET on Aug. 3, will receive £2.50 per £1,000 principal amount of notes.

Those who sent consents after the early consent deadline will receive £1.50 per £1,000 of notes.

The consent solicitation ended at 11 a.m. ET on Aug. 10. The solicitation began July 20.

The company expects the amendment to the loan supplement to be entered into on Aug. 14 with the consent fees paid on Aug. 17, according to a company notice.

As previously announced, the issuer sought approval to make changes to the notes documentation to permit future changes to the swap agreements and the loan agreement, without the consent of the trustee or noteholders, to

• Amend the knock-out level as long as the knock-out level is a number no greater than £1.00 per €1.00 and no less than £0.50 per €1.00; and

• Introduce a knock-out payment amount (being a sum payable semiannually to the swap counterparty under each swap agreement after the occurrence of the knock-out event), which is a number denominated in pounds sterling no greater than 2% of par and no less than zero.

The issuer previously said the reason for these changes is to permit the parties to the swap agreements and the loan agreement to agree to lower the knock-out level in each of the swap agreements from the current £0.64520 per €1.00 and then to allow the parties from time to time to agree to amend it further within the permitted range.

These amendments would decrease the probability that a knock-out event will occur if the euro depreciates against the pound sterling. The knock-out payment amount is the consideration for any such change to the knock-out level, the issuer explained.

The occurrence of a knock-out event will not constitute an event of default under the notes or the loan. Gazprom is not permitted or required to prepay the loan upon the occurrence of a knock-out event.

Deutsche Bank AG, London Branch (+44 20 754 76153, +44 20 754 76568 or gazprom.lm@list.db.com) and J.P. Morgan Securities plc (+44 20 7134 2468 or em_europe_lm@jpmorgan.com) are the solicitation agents. Deutsche Bank (+44 (0) 20 7547 5000 or xchange.offer@db.com) is also acting as the tabulation agent.

Gazprom is a Moscow-based natural gas producer.

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