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24 November 2015

Sayenko Kharenko advised Commerzbank on restructuring of subordinated Eurobonds of PrivatBank in the aggregate amount of USD 220 million through an English law scheme of arrangement

Sayenko Kharenko acted as Ukrainian legal advisor to Commerzbank AG (in its capacity as scheme solicitation agent) in connection with a restructuring proposal by PJSC Commercial Bank “PrivatBank” (PrivatBank) relating to USD 150 million loan participation notes due 2016 and USD 70 million loan participation notes due 2021, both issued for the purpose of financing subordinated loans to PrivatBank. The proposal included extension of maturity of the notes to 2021 and increasing the coupon rate on the notes to 11 per cent.

The restructuring proposal was implemented by way of an English law scheme of arrangement involving a cross-series noteholder approval and subsequent sanctioning by an English court. The proposal received overwhelming support of the noteholders – the scheme was approved by 98.26 per cent in number and 98.95 per cent in value of the notes at the creditors’ meeting.

This was the first debt restructuring of a Ukrainian bank involving a scheme of arrangement under English law. While still somewhat unconventional, scheme of arrangement is becoming a more popular means of foreign debt restructuring among major Ukrainian borrowers. Benefits provided by this instrument include the ability of the majority vote in favour of the restructuring to bind hold-out minority, possibility to combine creditors across several debt instruments for the purpose of approval and flexible approach of English courts in terms of jurisdiction over foreign debtors. This makes scheme of arrangement an attractive restructuring option for Ukrainian borrowers with foreign debt.

Sayenko Kharenko team on the transaction included counsel Anton Korobeynikov, associates Marta Lozenko, Taras Shyb and Dmytro Vasylyna, and was led by partner Nazar Chernyavsky.


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