How protective are Ukraine’s international bonds?

This note contains a brief commentary on some of the main legal terms in international debt issues of or guaranteed by Ukraine. The objective is to analyse the degree to which these bonds are consistent with practice in the international capital markets and to weigh up the balance between the sovereign debtor and the bondholder creditors in terms of the rights and protections granted by the terms of the bonds.

Our main conclusion is that the bond issue legal terms seek to enhance stability for both Ukraine and the bondholders if there is a crisis.

This commentary is based on the terms set out in an issue by Ukraine of $1bn (£600m) 7.95 per cent notes due 2014 covered by a prospectus dated 30 August 2012. We have, so far, looked at another 14 or so prospectuses covering international bonds, all governed by English law, and the relevant terms discussed in this note seem to be the same or very similar. Nearly all are for US dollars. These other prospectuses are for English law issues where the prospectus is dated October 2005, November 2006, January 2007 (Swiss francs), November 2007, November 2009 (Naftogas restructured guaranteed issue), September 2010, November 2012, February 2011, June 2011, July 2012, November 2012, April 2013 and February 2014. There are significant differences in the latter document. We have also looked through a prospectus of 7 December 2012 for an issue of around $550m notes issued by ‘Financing of Infrastructural Projects’ guaranteed by Ukraine where there are detailed differences compared with the direct bond issues listed above. We have not at this stage looked at the specific terms of trust deeds or the like (only at the prospectuses) or the terms of any notes that may be outstanding under earlier reschedulings of Ukrainian public debt or the terms of Ukraine’s domestic debt issues…

Click on the link below to read the rest of the Allen & Overy briefing.  

Sign in or Register to continue reading this article

Sign in

Register

It's quick, easy and free!

It takes just 5 minutes to register. Answer a few simple questions and once completed you’ll have instant access.

Register now

Why register to The Lawyer

 

Industry insight

In-depth, expert analysis into the stories behind the headlines from our leading team of journalists.

 

Market intelligence

Identify the major players and business opportunities within a particular region through our series of free, special reports.

 

Email newsletters

Receive your pick of The Lawyer's daily and weekly email newsletters, tailored by practice area, region and job function.

More relevant to you

To continue providing the best analysis, insight and news across the legal market we are collecting some information about who you are, what you do and where you work to improve The Lawyer and make it more relevant to you.

Analysis from The Lawyer

  • Panel reviews

    Panel reviews 2014: The chosen ones

    Which firms are cutting it in this era of slimline rosters, and who are the GC new brooms making clean sweeps? The Lawyer can reveal all

  • training

    Accutrainee: Revolution postponed

    At the time of its launch Accutrainee was described as a revolutionary change to the training model. Has it proved to be so? Not really.

View more analysis from The Lawyer

Overview

One Bishops Square
London
E1 6AD
UK
http://www.allenovery.com

Turnover (£m): 1,234.30
No. of lawyers: 2,194 (UK 200)
Jurisdiction: UK
No. of offices: 11
No. of qualified lawyers: 273 (International 50)