Ukraine’s Ukrenergo starts consent solicitation for 6 7/8% green notes

By Mary-Katherine Stinson

Lexington, Ky., July 28 – PJSC National Power Co. (Ukrenergo) launched a consent solicitation for its $825 million 6 7/8% sustainability-linked green notes due 2026 (ISIN: XS2404309754, US63718LAA26) guaranteed by Ukraine. Ukrenergo is seeking to pass a multiple series two limb written resolution, according to a notice Thursday.

Ukrenergo’s consent solicitation is on substantially the same terms as consent solicitations started by the government for its global notes. Namely, the issuers are seeking to delay maturities and interest payments by 24 months.

Solicitation details

The consent solicitations will expire at 5 p.m. ET on Aug. 9.

Results are expected to be announced Aug. 10, which is also the effective date.

Consents are required from holders of at least 66 2/3% of the aggregate principal amount of all the eurobonds under Ukraine’s consent solicitation and the Ukrenergo securities outstanding and more than 50% of the Ukrenergo securities for the proposal to become effective.

In other words, consents under Ukraine’s consent solicitation are being taken into account for determining whether the consent threshold under the Ukrenergo solicitation is met, provided the Ukraine proposal is effective.

Morrow Sodali Ltd. (+44 20 4513 6933, 203 609-4910, +852 2319 4130, Ukrenergo@investor.morrowsodali.com, https://projects.morrowsodali.com/Ukrenergo) is the information, tabulation and aggregation agent for the Ukrenergo solicitation.

Rothschild & Cie and Finpoint LLC are serving as financial advisors to Ukrenergo.

Proposal

The current proposal is necessitated by the challenges in maintaining and rebuilding the country’s power network during the Russian invasion and ongoing war, as well as ensuring Ukraine’s integration into the energy network of continental Europe, ENTSO-E, and expanding Ukraine’s export and import capabilities.

The proposal provides Ukrenergo with relief from liquidity outflows in connection with debt service obligations under the securities for 24 months, enabling it to focus its available financial resources on necessary efforts to rebuild and maintain the power network in Ukraine.

Specifically, the proposal would defer the maturity date and interest payment date by 24 months each. The maturity date would be deferred to Nov. 9, 2028 and the interest payment date to Nov. 9, 2024.

Any interest not paid during the deferral period would bear interest at the applicable fixed rate, provided that Ukrenergo has the option to partially repay the interest at any time or instead issue additional securities in an amount equal to the remaining deferred interest.

Ukrenergo is also requesting that holders approve the deferral of the reporting and testing dates for the renewable energy installed capacity and the renewable energy installed capacity percentage by 24 months each; the deferral of the step-up coupon date by 24 months to May 9, 2027; and a change to the definition of an adjustment event in the conditions to account for the impact of war, including the Russian invasion.

In addition, holders are being asked to waive any breach or default that may occur with the deferral, with Ukraine’s failure to make principal or interest payments or with any suspension of payments on any series of Eurobonds during the deferral period.

In sum, the proposal gives Ukrenergo relief from liquidity outflows in connection with debt service obligations under the securities for 24 months, enabling it to focus its available financial resources on necessary efforts to rebuild and maintain the power network in Ukraine.

Concurrent consent bids

Similarly, State Road Agency of Ukraine (Ukravtodor) is conducting a consent solicitation for its $700 million 6Ľ% amortizing notes due 2028 (ISIN: XS2357277149, US857329AA47) guaranteed by Ukraine.

Ukraine is also conducting a consent solicitation for its $3,239,320,000 GDP-linked securities, separate from the consent solicitation for its global notes.

The state-owned operator of Ukraine’s energy system and electricity transmission is based in Kyiv, Ukraine.

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