Ukrainian Railways extends consent solicitation for Rail Capital notes due 2026 to Dec. 23

By Mary-Katherine Stinson

Lexington, Ky., Dec. 21 – JSC Ukrainian Railways announced the results and an extension of its Dec. 5 consent solicitation related to the $300 million outstanding 7 7/8% loan participation notes due 2026 (ISIN: XS2365120885).

As of the previous consent deadline of noon ET on Dec. 20, holders representing 73.5% of the outstanding notes delivered consent instructions in favor of the extraordinary resolution.

The issuer also announced an extension of the consent period to 6 a.m. ET on Dec. 23 to allow holders with logistical and operational issues to deliver their consent.

As previously reported, the consent solicitation for the 2026 notes was launched in conjunction with a consent solicitation related to the $594,902,000 outstanding 8¼% loan participation notes due 2024 (ISIN: XS1843433472).

Both notes were issued by, but with limited recourse to, Rail Capital Markets plc for the purpose of making loans to Ukrainian Railways.

There is a cross condition. The consent solicitations depend on one another to be deemed successful.

Results of 2026 consent bid

Rail Capital announced on Dec. 19 that as of the voting deadline at noon ET on Dec. 16, the required quorum for the meeting for the 2026 notes had been reached, and voting instructions in favor of the extraordinary resolution in sufficient amount to represent the required consents had been received.

Effectiveness of the extraordinary resolution, if passed at the meeting, is subject to the cross condition being satisfied or waived.

Proposals

Generally, the concurrent consent solicitations are similar.

The consent solicitations are looking to replace the trustee, as the original trustee has informed the company that it will be unable to continue acting in that capacity.

The company is also seeking to extend the maturity dates. The notes due July 9, 2024 would be extended to July 9, 2026. The notes due July 15, 2026 would be extended to July 15, 2028.

Ukrainian Railways also seeks to defer interest payments for a support period of up to 24 months, starting in January.

During the support period, the issuer would be restricted from making certain payments such as dividends, share buybacks or interest in the borrower or repayment of subordinated debt.

The company would be allowed to borrow debt that has a blended weighted average life to maturity that falls on or after July 15, 2028 and create security on any such debt.

The borrower may also incur additional debt of up to €99 million under an existing facility agreement.

Additional debt

In total, the group expects to obtain additional debt of about €199 million under existing agreements. Additional financing for the group’s emergency needs may be incurred for up to €200 million.

Details

Consenting noteholders will receive a consent payment of $5 for each $1,000 note plus the amount of interest that shall accrue thereon.

For both notes, the consent payment deadline will be Jan. 31.

The solicitation agents are Dragon Capital (Cyprus) Ltd. (+357 25 376 300, Oleksandr.fedorov@dragon-capital.com) and J.P. Morgan Securities plc (+44 20 7134 2468, em_europe_lm@jpmorgan.com).

Kroll Issuer Services Ltd. is the tabulation agent (+44 20 7704 0880, ur@is.kroll.com).

The issuer is a Kyiv, Ukraine-based rail company.

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