23.04.03

Naftohaz Ukrayiny to transfer $1.4 bln in Eurobonds to Gazprom by July

Ukraine's Naftohaz Ukrayiny plans to transfer $1.4 billion worth of Eurobonds to Russia's Gazprom by July 1, as payment of debt for gas, company CEO Yuri Boiko said at a Friday press conference in Kyiv.

He said that the sides managed to arrive at a financial scheme that suited Gazprom. Boiko said that it is planned that as part of a scheme to settle for the bonds, Gazprom will not pay Ukraine the currency component for gas transit, amounting to $180 million per annum, and will pay for transit with gas.

Boiko also said that talks are underway on the discount at which the bonds will be redeemed, but added that it is still premature to speak of the size of this.

An agreement between the Ukrainian and Russian government on additional measures to ensure transit of Russian natural gas through Ukrainian territory, involving a Eurobond issue by Naftohaz Ukrayiny, was signed by the presidents of both countries in Kyiv on October 4, 2001 and was ratified by the Ukrainian parliament on November 15.

Naftohaz Ukrayiny issued Eurobonds amounting to a little over $1.43 billion to restructure its debt to Gazprom for gas. According to the conditions for the issue, Eurobonds maturing with two equal annual payments on May 1, 2003 and May 1, 2004 should be issued to cover 70% of capitalized interest from May 1, 2000 to May 1, 2002. In addition, capitalized interest is also subject to interest at the 12-month LIBOR + 1%.

The interest rate for the first coupon period is set at the six- month LIBOR + 1% per annum as of April 30, 2000. After the first coupon, interest is calculated on the unpaid principal once every six months at LIBOR + 1% on the day before the start of the next interest period, and is also paid every six months - on May 1 and November 1.

The principal on the debt is paid in equal lots of 5% of the issue one every six months - from May 1, 2004 to November 1, 2013.

According to the conditions for the bond issue, their nominal value amounts to $1,000. The intergovernmental agreement states the Ukrainian government guarantees the payments.