Commentaries
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Ukraine’s Naftogaz leaves Eurobond holders with little choice
The repayment date for Ukrainian state energy group Naftogaz’s $500 million Eurobond came and went on Wednesday, but all bondholders got was a coupon payment.
Talks to restructure the five-year bond have resulted in Naftogaz presenting its solution to the problem — swapping the old 8.125 percent bonds for new five-year ones which pay a slightly higher coupon of 9.5 percent and come with a government guarantee.
Given the way Naftogaz has approached its obligations to the Eurobond holders, it’s hard to see what comfort “an irrevocable and unconditional sovereign guarantee from the Government of Ukraine” will give them.
The reality though is that bondholders have little choice. Vote against the proposed exchange and they could end up with nothing at all — and a lengthy and expensive court battle on their hands.
A bit of a mezz in the Carwash
It’s not all bad news for mezzanine investors after the recent UK court verdict on the debt restructuring of IMO Carwash, the Carlyle-backed management buyout which defaulted earlier this year. Senior lenders devised a plan transfer its assets to a new company, leaving junior-ranking mezzanine investors with nothing. The mezzanine debtholders contested the plan, but a UK judge disagreed and approved it.
That is a blow for mezzanine investors everywhere, because it tips the balance in favour of senior lenders for future restructurings under so-called schemes of arrangement. But they shouldn’t feel too hard done by, and the judge’s arguments may even help them in future.
Back to the future for debt panel proposal
Anything that saves time and money in the restructuring of debt sounds like a good idea — particularly given there are likely to be a lot more bad loans that will need sorting out in the coming months and years.Â
London bankers working in this area have begun pushing an idea to by-pass the courts in the restructuring of billions of pounds worth of debts.
Chicken and Koenigsegg
I received something of a flaming at the hands of some readers for making a few gentle digs at the presumptions of Koenigsegg – a tiny Swedish sports car maker that is trying to buy Saab from General Motors. In particular, I was chided for not having done my homework before pronouncing – the implication being that I was too lazy to uncover the vast host of facts lying around out there in the public domain that would reveal even to a total dunderhead the merits and sense of this transaction.
Well, it would certainly have made for a shorter post had I stuck to these “facts”.
Saab’s Phøenix moment?
The great global automobile restructuring is throwing up some fairly unlikely bidders for some famous marques. Who would have thought Magna (who?) would end up buying Germany’s mighty Adam Opel? And who would have seen Fiat as Chrysler’s white knight?
Although, come to think of it, there’s a certain tragic inevitability about the ghastly Hummer ending up in a death embrace with the Sichaun Tenzhong Heavy Industrial Machine Co.
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The Wall
