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PrivatBank hasn't made new amortization payment for $200 mln eurobonds - UK SPV Credit Finance Plc

PrivatBank hasn't made new amortization payment for $200 mln eurobonds - UK SPV Credit Finance PlcPrivatBank (Dnipro) hasn't made amortisation payment of $40 million on February 23, 2017, for $200 million 10.2% loan participation notes due 2018.

According to the issuer of the securities – UK SPV Credit Finance Plc – on the London Stock Exchange (LSE), no payment will be made by the issuer to noteholders in respect of the amortisation amount expressed to be payable on February 23, 2017.

Noteholders with queries concerning the content of this notice should contact the trustee - Deutsche Trustee Company Limited.

As reported, during the nationalisation of PrivatBank its liabilities to the special purpose vehicle, the issuer of loan participation notes, were included in the bail-in procedure and were exchanged for the additionally issued shares of the bank.

Later the Individuals Deposit Guarantee Fund that introduced temporary administration at the bank sold all the bank's shares to the state for UAH 1.

The bailed-in notes are as follows: $175 million 10.875% senior unsecured loan participation notes due February 28, 2018, $200 million 10.25% senior unsecured loan participation notes due January 23, 2018 ($40 million was paid in August 2016), and $220 million 11% subordinated loan participation notes due 2021.

UK SPV Credit Finance Plc registered in Britain issued the notes due in January and February 2018. The notes due 2021 were issued via ICBC Standard Bank Plc (Britain) but were re-registered to UK SPV Credit Finance Plc during restructuring the debt.

According to the conditions of the issue of notes due February 2018, the issuer would provide the funds raised after the placement of the notes as a debt to PrivatBank. The securities have limited resource.

According to the document, if the bank is declared insolvent, the bank is transferred to the management of the Individuals Deposit Guarantee Fund. The fund appoints a temporary administrator to the bank who is authorised to take any steps to restore the solvency of the bank.

At the end of December 2016, the holders of more than 20% of eurobonds in nationalised PrivatBank united in an ad hoc committee for the common protection of their rights and interests after the exchange of their securities for the additionally issued shares of the bank. The committee consists of five funds, including British, American and Swiss, holding different issues of securities for a total of more than $120 million.

Holders of eurobonds of nationalised PrivatBank seek to challenge the forced exchange of their securities to the additionally issued shares in the London Court of International Arbitration (LCIA).
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