Borrowing in “Difficult Times”
In Ukraine, the year of 2009 was driven by the general slowdown on international financial markets. According to Julia Samoylova, senior associate of Andriy Kravets & Partners, the preceding year was noted in the main by IMF loans, EBRD financing, loans from foreign banks to their subsidiaries and a very few arm’s length transactions. Many Ukrainian borrowers were busy restructuring the borrowings they made in 2008 or earlier. The National Bank of Ukraine substantially reinforced its supervision and control over foreign loan transactions, imposed serious limitations on foreign currency deals and reintroduced a cap on interest payments on borrowings from foreign lenders.
Despite the fact that international financial markets are tumbling, Sayenko Kharenko has represented clients in several large debt capital markets transactions and a significant number of sophisticated restructurings of capital markets instruments. In particular, a very strong team led by three partners, namely Michael Kharenko, Vladimir Sayenko and Nazar Chernyavsky, represented VTB Capital in a USD 789 million Eurobond placement by VTB Leasing; Bank of America Merrill Lynch, BNP Paribas, Deutsche Bank in a USD 290 million Eurobond placement by Central European Media Enterprises (CME); Eurobond structurings on the market, including the USD 1.595 billion restructuring of NJSC Naftogaz of Ukraine external debt, organized by Credit Suisse; USD 1 billion restructuring of Alfa-Bank Eurobonds, organized by HSBC and UBS; as well as repurchase of Interpipe’s outstanding Eurobonds, organized by the Royal Bank of Scotland; restructuring of XXI Century Eurobonds, as organized by Renaissance Capital.
Enjoying a strong reputation in equity and debt capital markets as well as cross-border lending transactions, Baker & McKenzie recently handled work related to debt restructuring before international lenders and noteholders. The team acted as Ukrainian law counsel to major European financial institutions in connection with the temporary administration and debt restructuring proposals of Nadra Bank; the Lead Bank and the Steering Committee of international lenders in connection with the restructuring of debts of the First Ukrainian International Bank. Serhiy Chorny and Oksana Simonova are known for their work in the Ukrainian banking sector. Glib Bondar is well regarded for his significant expertise on the debt side.
Asters team of lawyers, as led by experienced practitioners Armen Khachaturyan, Svitlana Poroschuk and Iryna Pokanay, provides legal advice to international and local banks and financial institutions as lenders, issuers and borrowers in various cross-border and domestic finance projects. In 2009 the team advised the EBRD on a number of finance projects in Ukraine; supported ING Bank N.V. in connection with a USD 20 million pre-export finance facility to Grain Trading Company (GTC). The firm also handled a number of potential capital markets transactions, in particular, by an Ukrainian insurance company in connection with an anticipated contemplated private placement transaction by one of its subsidiaries; leading international agricultural groups in connection with the anticipated IPO on the London Stock Exchange and Lithuanian Stock Exchange, including due diligence of a major Ukrainian manufacturer of mineral fertilizers and grain producers.
As one of the key practices dealing with international financial instruments, Magisters, as other players in 2009, experienced an increase in restructuring work. The Kiev team headed by Olga Khoroshylova represented client NJSC Naftogaz of Ukraine in terms of restructuring its USD 1.595 billion external debt and Alfa-Bank in its USD 1.045 billion Eurobond restructuring. Restructuring of cross-border banking lending is also part of its regular work. For example, the team advised the State Administration of Railway Transport of Ukraine in the restructuring of a syndicated loan facility provided by Barclays Bank.
Salans in Kiev is involved in cross-border lending as well as is acting as legal advisor to the nationwide commercial bank Nadra regarding the reorganization and restructuring of the bank’s external debts (trade related indebtedness and Eurobonds) with about 70 bank lenders and at least 30 Eurobond holders. Natalia Selyakova, partner, head of banking and finance group in Ukraine is the main expert in international finance.
The recent experience of Vasil Kisil & Partners includes advising Swedbank AB (Sweden) on international debt and equity finance issues related to implementation of a Ukrainian SPV structure; Skandinaviska Enskilda Banken AB (Sweden) on debt and equity instruments required for financing SEB Bank, its Ukrainian subsidiary; and representing Global Space Management (Israel) in a lending transaction with UkrSibbank. In addition, the firm’s experience includes advising clients on international finance instruments in complex infrastructure projects, such as construction and concession projects. Denis Lysenko, partner, and Yulia Kyrpa, senior associate, are highly regarded for their international finance expertise. Oleg Alyoshin, partner, Alexander Borodkin and Natalia Dotsenko-Belous are recognized by clients for their expertise in international infrastructure projects finance.
The team of DLA Piper is known for its involvement in complicated cross-border lending transactions. The past year was notable for international restructuring projects where the team acted for both debtors and lenders. It advised on the restructuring of debt of more than USD 1 billion in total of the largest Ukrainian industrial groups before a pool of more than 30 creditors; represented Mizuho Corporate Bank, Ltd in connection with restructuring the debt of more than USD 400 million owed by a well-known Ukrainian bank; assisted a Russian bank in the course of financial restructuring of wine production assets, etc. Oleksandr Kurdydyk, partner and head of practice, is the key project member in the office and a visible figure on the Ukrainian market.
The practice of local firm Andriy Kravets & Partners is known for giving advice to major financial groups, leading financial institutions, large international and Ukrainian companies. The team of associates Julia Samoylova and Daria Volkova, as led by partner Andriy Kravets, has gained a reputation of being experts in international investment matters. In 2009 the firm was traditionally approached by international investment banks to advise on finance transactions in Ukraine. Among other representations, the firm acted as a counsel to the Finnish Fund for Industrial Cooperation Ltd (Finnfund) in connection with the secured mortgage loan facilities to ZaporizhKran; to Magyar Export-Import Bank Zrt. in connection with mortgage financing secured by real estate property of a Ukrainian company.
The “magic circle” member Clifford Chance had a busy year for cross-border lending, focused on advising international banks on providing finance to Ukrainian companies. Clients include Citibank, Royal Bank of Scotland, Intesa SanPaolo S.p.A., Societe Generale, etc. Jared Grubb, Olexiy Soshenko and Roman Stasiv are the key practitioners in the Kiev office.
The local practice of Okhrimchuk Grushyn Khandurin, known for representing foreign banks and financial institutions like Raiffeisen Zentralbank Oesterreich AG, Deutsche Bank AG, VTB Capital Plc in crediting the Ukrainian industry, has had a busy year giving restructuring and rescheduling advice to BNP Paribas, ABN AMRO Bank, STEMCOR UK LIMITED.
As it is active in the banking and finance sector, Grischenko & Partners represented the participant of a syndication of banks in the NJSC Naftogaz of Ukraine external debt restructuring, which was arranged by Credit Suisse. Oleg Vysochinsky, one of the firm’s partners, is known in the market.
Chadbourne & Parke, CMS Cameron McKenna, Beiten Burkhardt, Volkov Koziakov & Partners, Salans, Konnov & Sozanovsky, Gide Loyrette Nouel, AstapovLawyers, INTEGRITES, International Law Offices were active in the cross-border lending field and various type of funding (please turn to the Banking & Finance survey to read more).