Regarding Restructuring of the Foreign Indebtedness of the Bank Finance and Credit

press-release
 
      Negotiations on restructuring of foreign indebtedness require fulfillment of many legal terms, but at the same time Bank Finance and Credit strictly supervises compliance with the chosen strategy, which is equality of rights of all the lenders. 
    
      Discussions of the terms of restructuring are conducted in the context of the general structure of foreign debt such as syndicated facilities, issue of Eurobonds and trade finance. Terms and conditions as well as further steps in reaching agreements are discussed during negotiation process.
      
      Taking into consideration that different capital markets instruments have different terms – from 6 months to 3 years – Bank Finance and Credit suggested to make position of participants of the syndicated facility as a base for negotiation, and then together with them as well as the holders of other instruments to discuss and accept terms and conditions for restructuring all the debts. Proposal of the Bank Finance and Credit, which was submitted to all the lenders together with the financial advisor of the Bank - Morgan Stanley – was based on the fact that participants of the syndicated facility posses financial instrument with the medium term and restructuring of this instrument could become a so called benchmark for others. All the participant accepted our proposal, and now several parallel processes of negotiations are taking place.
 
      Proposal of the Bank Finance and Credit that was presented by the bank at the meeting with the lenders (participants of the syndicated facility) in London in the end of June had a positive reaction. Suggestion included description of terms of restructuring, costs and other conditions. It`s worth mentioning that proposal of the Bank Finance and Credit regarding the term of restructuring syndicated facility for 1.5-2 year was positively perceived and understood at the meeting. So, even the first `emotional` estimations show that cooperation with Morgan Stanley as the financial advisor of the bank brought positive results.

      The second parallel process – discussions of the Eurobond restructuring – is also in progress. Negotiations with bondholders are held through Trustee as for technical reasons it is impossible negotiate with all the bondholder at the same time, and bondholders are free to trade their bonds in the market thus changing owner structure almost every day. Therefore, Trustee upon receiving information and by liaising with the Issuer of bonds (Bank Finance and Credit) regularly notifies all bondholders about the Bank's proposals. Trustee always has complete and finalized up-to-date list of bondholders - this is its function.

      Now it is obvious that the term of Eurobond restructuring should be approximately equal to the one of the circulation of this instrument during its initial placement (3 years). Besides, no impairment of their rights in our proposals, such as discounts during restructuring, allows us to more easily find understanding and make mutually beneficial agreements. Our preliminary agreements show that today bondholders can see bond coupon at the existing level, i.e. about 10.5 %, and the Bank does not receive any requests to increase this coupon, because all the participants of negotiations understand that with the current level of LIBOR rates coupon rate of our bonds is in a reasonable range for foreign investors for this risk segment.

Contact:

Press-secretary
Bank «Finance and Credit»
Nataliya Napadovskaya
(044) 499-26-51