Legal Alert: NBU Simplifies Foreign Currency Control Regime for Foreign Debt Restructuring

Legal Alert: NBU Simplifies Foreign Currency Cont...

2 July 2015

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On 23 June 2015 the National Bank of Ukraine (the “NBU”), a monetary and foreign currency control regulator in Ukraine, adopted Resolution No. 409 (the “Resolution”). The Resolution aims at the simplifying of foreign currency control regime for Ukrainian companies, which contemplate restructuring of their debt denominated in foreign currency before foreign creditors.

Key features of the Resolution are represented below:

  1. The Resolution concerns only the debt (the “Debt”) before foreign creditors in foreign currency, which was arisen from either (a) loans based on subordinated debt terms (refers to Ukrainian banks) or (b) loans, which were granted based on proceeds from the placement of debt securities abroad;
  2. Ukrainian companies, which have reached the deal to extend the maturity of the principal of the Debt are allowed to pay the commission fee (the “Commission Fee”) for such extension to its foreign creditors without including it in the calculation of the maximum interest rate established by the NBU for cross-border loans and subordinated debt; and
  3. The Commission Fee can be paid in the amount of up to 2% of the principal of the Debt, subject to prolongation, if the following conditions are met simultaneously:
    • the maturity of the Debt is extended for the period of not less than two (2) years;
    • the Commission Fee is specified by terms of loan agreements (including by terms of amendment agreements on extension of the maturity of the Debt);
    • debt securities (based on which the Debt was financed) are listed on foreign stock exchange (this rule does not refer to loans provided based on subordinated debt terms above); and
    • respective extension of the maturity of the principal of the Debt is registered by the NBU.

The Resolution came into force on 24 June 2015.

 

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Legislation: Resolution of the National Bank of Ukraine No. 409 dated 23 June 2015 “On Carrying Out Certain Payments On Honoring of Foreign Debts under Loans in Foreign Currency”


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