Page 72 - UKRRptOct23

time. Subsequently, their value dropped below 20% and even touched 15% at the low point.
This year the bonds value has recovered substantially, trading at just over 50% on September 8, reaching around 50.25%. In February, just prior to the escalation of the conflict, they had reached levels between 55% and 75% of their nominal value.
Several factors have contributed to this recent upswing in Ukraine's GDP-linked bonds. One significant catalyst was the visit of US Secretary of State Anthony Blinken to Kyiv last week, during which he reaffirmed America's commitment to providing aid and support to Ukraine.
At the same time, economic projections for Ukraine have been positive despite the war as the economy starts to recover from the worst of the war shock. Investment firm Dragon Capital recently revised its forecast for Ukraine's economic growth in the current year, increasing it from 3% to 4.5%, at which point the warrant payouts start to become significant. Similarly, the Ukrainian government adjusted its forecast, elevating it from 2.8% in June to a more optimistic 4%.
Ukraine’s leading energy company DTEK Holdings Limited has announced an extension of the deadline for receiving applications for its Dutch auction to redeem $50mn worth of DTEK Energy eurobonds maturing in 2027, Interfax Ukraine reported on September 27.
The new deadline for applications is October 2. To incentivize bondholders to consent to some relaxation conditions, DTEK Holdings has increased the premium on the bonds buyback from 0.75% to 1%.
DTEK Holdings said it will not reduce the volume of bonds on offer from the $50mn buyback amount. Bondholders also have the option to withdraw their consent if their tender offers are not accepted.
Initially the deadline was set as the evening of September 26, with DTEK Holdings retaining the right to modify the maximum redemption amount during the process.
DTEK Holdings has requested eurobond holders to review covenants to create more flexibility for investment opportunities and a comprehensive renovation campaign. The company highlighted the significance of developing more energy storage systems for the Ukrainian energy market, a sector constrained by existing bond conditions. Additionally, the company said the need for extensive capital investment to repair and replace damaged or outdated equipment was a key motive for the buyback offer.
DTEK also pointed out the change in bond issuer from DTEK Finance plc to the parent company, DTEK Energy B.V., at the end of November last year. This alteration may limit its capacity to conduct regular activities under the existing covenant limits.
Notably, DTEK Energy initiated negotiations with a group of bondholders concerning the terms of the tender offer and the Request for Consent on September 21.
72 UKRAINE Country Report October 2023 www.intellinews.com