Privatbank formally proposes restructurings of two Eurobonds

Обзор облигаций 30.06.2015 Ukraine's largest bank, Privatbank, sent its bondholders a proposal to extend the maturities of two bonds that are about to mature: for the US$200m September 2015 9.375% bond, the bank requests a three-year extension, while for the US$150m February 2016 12m LIBOR+ 5% bond, the bank requests a five-year extension. The coupon for both securities is expected to be increased, subject to further negotiation. The bank has also announced a 2% commission payment upon the completion of the restructuring. The bank intends to follow the procedures set by Oschadbank and Ukreximbank which announced restructurings earlier this year. Although the percentage of debt to be restructured is considerably small in comparison to Privatbank's total liabilities, the bank is trying to avoid negative publicity or even the mere hint of "default" that might arose from the announcement of this restructuring. Currently, the bank's local currency retail deposits, its primary source of funding, is growing at a robust 5% per month. However, the interest rate offered on these accounts can reach 29% annually, significantly above the market average of 21% annually.