Alfa-Bank lowers threshold, minimum in exchange offer for $1.05 billion loan participation notes

By Jennifer Chiou

New York, July 8 - CJSC Alfa-Bank announced amendments to its exchange offer and consent solicitation for the $345 million of 9¾% loan participation notes due 2009 issued by Emerging Markets Structured Products BV and the $450 million of 9¼% loan participation notes due 2010 and $250 million of 12% loan participation notes due 2011 issued by Ukraine Issuance plc.

The bank said that the changes will enable holders with relatively small amounts of the notes to participate when they otherwise would not have been able to join in on the offer.

Holders can now participate if they submit enough existing notes to receive at least $85,000, down from $100,000, of the new notes.

In addition, the threshold for participation has been cut to $117,000 from $137,000 for the 9¾% notes and 12% notes, and to $100,000 from $118,000 for the 9¼% notes.

Holders who tender will receive new 13% amortizing loan participation notes due 2012 and cash.

Alfa-Bank previously said it is carrying out the exchange because it has been "substantially affected by strained macroeconomic conditions in Ukraine and the world," creating a risk that it might not be able to meet the maturities of the existing notes, or the put option on the 12% notes, if exercised.

For each $1,000 principal amount of the 9¾% notes submitted by the early exchange deadline, Alfa-Bank is offering $270 in cash and $730 of new notes.

For each $1,000 principal amount of the 9¼% notes submitted by the early exchange deadline, Alfa-Bank is offering $150 in cash and $850 of new notes.

For each $1,000 principal amount of the 12% notes submitted by the expiration, Alfa-Bank is offering $270 in cash and $730 of new notes.

Alfa-Bank is also soliciting consents to amend the existing notes to add an option to the 9¼% and 9¾% notes to allow it to call the securities and exchange them for new notes and to the 12% notes to allow it to call them and exchange them for new notes and cash. The solicitation is also seeking to remove the put option on Aug. 11, 2009 from the 12% notes.

Holders of the 9¼% and 9¾% notes who tender after the early exchange deadline or whose debt is called will receive $1,000 principal amount of new notes for each $1,000 principal amount of existing notes. For the 12% notes, the payment on exercise of the call will be $100 in cash and $900 principal amount of new notes per $1,000 principal amount of existing notes.

The new notes will be issued by Ukraine Issuance plc, pay a quarterly coupon of 13% and mature in August 2013. They will amortize in equal quarterly amounts starting one year after the first coupon payment and have an average life of two years.

The early exchange deadline is 11 a.m. ET on July 14, and the offers expire at 11 a.m. ET on July 21. The early deadline does not apply to the 12% notes.

A noteholders' meeting will be held for the 12% notes on July 16 and for the other two series on July 23.

For each series of notes Alfa-Bank needs a quorum of two-thirds of the notes to amend their terms and votes from 75% of those attending.

The dealer managers are HSBC Bank plc (Call 888 HSBC 4LM, call collect 212 525-5552, +44 20 7991 5874 or liability.management@hsbcib.com) and UBS Ltd. (+44 20 7567 0525 or mark-t.watkins@ubs.com). The exchange and tabulation agent is Lucid Issuer Services Ltd. (+44 20 7704 0880 or abu@lucid-is.com, attention Sunjeeve Patel or Yves Theis).

Alfa-Bank is a Kiev-based commercial and retail bank.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.