Very Broad Array of Legal Requirements

I n the view of a senior associate of DLA Piper Ukraine, Pavlo Kazymirov, there have been two major changes in the Ukrainian financial regulations recently. First, the NBU amended the rules for registration of loans from non-residents to Ukrainian borrowers. In particular, the NBU has changed the way the maximum interest rate cap will be calculated starting from 1 January 2008. From now on the NBU will publish a maximum interest rate every 6 months calculated on the basis of average weighted returns on Ukrainian Government USD Eurobonds plus 2% per annum. Second, the National Bank of Ukraine made amendments to certain regulations and has allowed international financial institutions, such as EBRD and IFC, to grant loans to Ukrainian borrowers in Ukrainian hryvnyas. For those Ukrainian companies, which have no foreign currency proceeds, this is a good chance to obtain large financing at relatively low interest rates without being exposed to foreign currency risks.

The attorneys of Sayenko Kharenko have extensive experience in the field of international finance. In 2007, the firm handled the majority of Eurobond and similar crossborder debt capital markets deals by Ukrainian entities. It also developed and implemented new and innovative capital markets transaction structures in Ukraine. The firm advised on the most significant financings involving the Government of Ukraine and the City of Kiev. It also acted for Citigroup, Credit Suisse, Deutsche Bank and UBS in two Eurobond offerings of external state borrowing of Ukraine for a total value of USD 1.2 billion, and Citigroup, Deutsche Bank, UBS and Credit Suisse in the USD 250 million Eurobond issue by the City of Kiev. The firm also advised Credit Suisse on the establishment of USD 1.5 billion MTN program by TASKommerzbank; UBS on the establishment of USD 1 billion MTN program by Alfa-Bank; UBS on USD 500 million Rule 144A Eurobond issue by PrivatBank; Ukrsotsbank on USD 400 million Eurobond issue; BNP Paribas and HSBC on USD 200 million Eurobond issue by UkrSibbank; HSBC and UBS on USD 175 million Eurobond issue by Nadra Bank; ABN Amro and ING in USD 200 million Eurobond issue by Interpipe and ING on USD 175 million Eurobond issue by XXI Century. In 2007, the firm handled the first and so far the only securitisation in Ukraine by acting for UBS as lead manager of USD 180 million securitisation by PrivatBank. The firm is also very active in equity deals and handled the EUR 1.2 billion 144A share offering by Raiffeisen International Bank-Holding AG acting for Deutsche Bank and Raiffeisen Centrobank AG; USD 130 million IPO by Kiev Donbass Development Group acting for ING Bank and Renaissance Capital, about USD 105 million IPO by TMM, and a number of private placements listed on international exchanges. Michael Kharenko, Vladimir Sayenko, Nazar Chernyavsky and Oleksandr Olshansky are the firm’s leading specialists in this field.

AGA Partners are expanding their international finance practice. The firm’s recent projects include risk assessment and strategy advice to an international bank group in its long-term commodity financing projects in Ukraine, pre-IPO evaluation for a major Ukrainian meat producer, structuring a cross-border lending deal with several types of underlying security and many others. Aminat Suleymanova and Ivanna Dorichenko are the leading experts in the area and come particularly recommended for their expertise and valuable advice on trade finance issues, international payments and finance raising techniques.

In 2007 DLA Piper Ukraine advised AISI Realty Plc on its USD 109.7 million IPO on the Alternative Investment Market at the London Stock Exchange. The finance and projects team of the office also supported the Olympic Entertainment Group in its EUR 70 million IPO on the Tallinn Stock Exchange. DLA Piper acted as legal counsel to the Financial & Investment Energy Holding (F.I.E.H.) Limited with regard to issuance of USD 50 million 5% senior unsecured mandatory Convertible Notes due 2012 by GNG Finance, a subsidiary of F.I.E.H. The notes are convertible into shares of GNG Finance or, as the case may be, OJSC Concern Galnaftogaz upon a qualified IPO taking place. Oleksandr Kurdydyk, partner, leads the practice group, together with senior associates Pavlo Kazymirov, Dmytro Derkach, Illya Muchnyk and Natalia Fuklyeva.

Beiten Burkhardt has the global perspective and local expertise to complete even the most complex transactions for corporate borrowers, commercial lenders and all kinds of investors – corporate, financial sector and governmental. Its lawyers advised a German leasing company with respect to drafting of entire documentation and business templates, including security documents, under Ukrainian law; a Ukrainian construction company on an IPO in Germany; a German bank in acquisition of a major Ukrainian bank, including preparation and carrying out of due diligence in the context of the tender, as well as advising in the negotiations and assistance in execution of various agreements (SPA, SHA); a German public company on the EUR 40 million transnational debt financing of the joint venture with a Ukrainian company, including legal and tax structuring, advising on the terms of the deal, review of the relevant transaction documentation, and negotiations with a group of banks. The firm’s transactions involved most of the popular jurisdictions for finance: various segments of stock exchanges in London, Luxembourg, Frankfurt am Main, Zurich; lenders from Austria, Cyprus, Germany, Switzerland, the UAE, UK and USA. Among the pioneers of the market, the firm also assisted international corporations involved in trading carbon emissions procedures. Beiten Burkhardt’s international finance team is co-headed by Marina Tegypko and Dr. Oleg Zagnitko.

In 2007 Volkov & Partners advised Societe Generale, ABN AMRO on finance facilities to one of the leading grain traders in Ukraine and ABN AMRO on finance facilities to one of the leading sugar producers in Ukraine. The finance team of Volkov & Partners includes Oleksiy Volkov, Andrey Karnaukhov and Oleksandr Aleksyeyenko.

Throughout the course of the year the Kiev office of Ernst & Young assisted a number of major Ukrainian companies with their capital markets transactions. The team of Yulia Logunova and Igor Chufarov advised companies from different industries such as retail, oil and gas, investments and real estate. Projects included capital markets driven corporate, legal and tax restructuring, developing the optimum tax and legal set up for posttransaction activities, issuing transaction related opinions and ongoing advice.

Specialists of Gramatskiy & Partners acquired extensive practice in the area of international finance. In recent years its practitioners have provided preparation and support in the international financing schemes of Ukrainian Companies Group еТrП. The reputation of leading specialists in the field of international finance was earned by Alexander Koval and Tatiana Voloshina.

Grischenko & Partners and its partners, Sergei Voitovich and Oleg Vysochinsky, were noted for representing an international finance organization in the granting of a secured loan to one of the biggest Ukrainian petrol companies, carried out legal support for a Eurobond issue by Kreditprombank and the Industrial Union of Donbass. Tsirat Anna heads the department of international finance transactions at the Jurvneshservice law firm. In 2007 the firm was involved in aircraft finance transactions where innovations, assignments, leasing and loan agreements were worked out.

Experts of the law firm Dmitrieva & Partners render the follwong wide range of services in the sphere of international financing: elaboration of corporate and tax schemes for minimization of tax allocation and protection of the rights of client, acquiring a license from the NBU on carrying out investments abroad, due diligence and international investments risk assessment. Olga Dmitrieva was noted as the firm’s leading expert in international financing. The Kiev office of Gide Loyrette Nouel arranges its practice in close cooperation with specialist legal teams in London, Paris and New York. The key sub-directions in the area of international finance by Gide Loyrette Nouel bring together project finance, acquisition finance and structured finance.

In 2007 Arzinger & Partners provided legal support to a foreign bank in a number of international deals involving the purchase and modernization of equipment. Partners Inna Laska, Anna Pogrebna and Wolfram Rehbock are the main practitioners.

Shevchenko Didkovskiy & Partners regularly represents international and domestic banks and financial institutions, trading and finance companies, as well as lenders, issuers and borrowers in diverse banking and financing transactions. Partners Armen Khachaturyan, Oleksiy Didkovskiy and Iryna Pokanay — the firm’s key experts in this field — developed various cross-border security structures, drafted, analyzed and negotiated different security agreements, including agreements on the pledge of real estate, movable property, receivables, rights of claim, as well as assignments, suretyships and guarantees. The firm’s specialists provided legal advice in the field of international finance to clients like the EBRD, IFC, Deutsche Bank, Standard Bank, BNP Paribas, Swedbank, Turkie Garanti Bankasi A. S., Ceska Exportni Banka in connection with diverse banking and financing transactions. International financing deals where the firm acted as a counsel include advising Swedbank AB in connection with acquisition of 99.99% OJSC TAS-Kommerzbank shares, and consequently, controlling equity in TAS Investbank, as well as provision advice on various corporate and finance matters related to post-acquisition and provision of a USD 30 million subordinated loan to TAS-Kommerzbank. Attorneys provided legal advice to Turkie Garanti Bankasi A. S. in connection with a secured loan to Marka Ukraine LLC, represented CEB in respect with granting secured loans to Kuzminetsky Brick Factory in an aggregate exceeding USD 17 million and to other Ukrainian borrowers; Deutsche Bank UK Bank Limited with respect to provision of loans in the aggregate amount of USD 125 million to JSC The State Export-Import Bank of Ukraine. The firm also represented lead managers in the issue of USD 100 million Eurobonds by Bank Pivdennyi and has acted as Ukrainian law counsel in a number of other Eurobond projects still being worked on.

International finance is one of the most dynamic growth areas of Vasil Kisil & Partners legal practice. The firm is highly recommended by both international, foreign and domestic financial institutions as well as local borrowers. In 2007 the firm acted for a number of foreign banks (including BNP Paribas (Suisse), Calyon) in connection with cross-border trade and project financing involving Ukrainian borrowers and/or exporters, as well as one of the first EBRD-financed projects in the emissions trading in Ukraine under the Kyoto Protocol. Vasil Kisil & Partners represented Exco Plus with respect to the issue of USD 72.0 million no interest special bonds by the Seven Hills Group (Scorpio Real Estate Group). Partners Oleg Alyoshin and Denis Lysenko are the firm’s main international finance experts.

Lavrynovych & Partners provides legal services in almost all areas of practice for international companies, including the Ukrainian private sector, state bodies, etc. Iryna Marushko is regarded as a key financial law specialist of the firm. In the last couple of years Baker & McKenzie has become a prominent player of legal practice in this field. Acquired experience is representative and wide-ranging: IPO, international securitization, Eurobond issues, cross-border lending. In 2007 Baker & McKenzie advised Kernel Holding S.A in its debut on the Warsaw Stock Exchange; Ferrexpo Plc in its initial public offering of shares (the company raised USD 419 million) on the London Stock Exchange, the first full UK listing for a company from Ukraine and only the second issue from the CIS to achieve a Main Market listing on the LSE as well as the largest IPO from Ukraine. Serhiy Chorny, Oksana Simonova, Svitlana Romanova, Svyatoslav Sheremeta, James Hitch, Hennadiy Voytsitskyi, Mykola Stetsenko are practitioners in IPO projects. As to the real estate finance sphere, the company advised KDD Group N.V., one of the leading real estate developers in Ukraine with respect to the admission of primary and secondary shares to the Alternative Investment Market on the London Stock Exchange. The company represented a number of banks in their Eurobond issue, for example, TASKommerzbank in USD 1.5 billion MTN program, issue of Eurobonds by UkrSibbank, PrivatBank; advised Interpipe, XXI Century and represented the City of Kiev in its offering of USD 250 million 8.25% Loan Participation Notes due 2012. Baker & McKenzie was Ukrainian transaction counsel in the first cross-border securitization of the mortgage portfolio of PrivatBank. The purchase price was set at USD 180 million and the notes are listed on the Irish Stock Exchange. Serhiy Chorny and Glib Bondar are among the most reputable lawyers in this area and were recommended in our poll.

Magister & Partners is highly reputable in this area of practice. The firm’s lawyers assisted in international bond issues, public offerings on international capital markets, syndicated and bilateral lending, project finance, and Public Private Partnerships. Since 2001 Magister & Partners has been acting as an adviser to the Ukrainian Ministry of Finance on external debt with every Eurobond and all state-guaranteed borrowings. For example, in 2007 the company’s legal practitioners assisted in USD 700 million and USD 500 million issues of Eurobonds by the Ministry of Finance of Ukraine. Outstanding deals in 2007 include providing advice to Ukrainian banks in their Eurobond issues: representing Alfa-Bank in MTN program of USD 1 billion Eurobond issue and USD 185 million issue; represented the First Ukrainian International Bank (USD 275 million); advised Nadra Bank (USD 175 million), and provided assistance to lead managers - ABN Amro and Credit Suisse in arranging a USD 400 million issue of Eurobonds by Ukrsotsbank. Another dimension of international finance experience, namely cross-border lending, was reflected in legal support provided to Alfa- Bank and Ukravtodor. Partner Olga Khoroshylova has particular experience in all aspects of sovereign borrowings on Eurobond and other offerings on international markets, having advised on every bond offering completed by the Ministry of Finance of Ukraine and on every capital markets and lending transaction guaranteed by the State of Ukraine.

Salans regularly advises on different financial matters. A recent example is representation of the Furshet Group with respect to the USD 750 million issue of CLNs arranged by Renaissance Capital and cross-border lending. Natalia Selyakova and Oleg Batyuk are leading lawyers in such projects.

The Silecky Firm, affiliated with Squire, Sanders & Dempsey, is engaged in corporate finance matters. Its recent experience shows particular awareness in initial public offerings and private placement issues. In 2007 the firm advised a sponsor, financial adviser, global coordinator and joint bookrunner JP Morgan on the initial public offering of shares of a Ukrainian iron ore pellet producer, Ferrexpo AG, on the Main Market of the London Stock Exchange. The IPO raised approximately USD 420 million for 25% of shares in the company. Another deal involved giving advice to the Karavan Group in the private placement of USD 55 million of shares to a group of international institutional investors. Peter Teluk, partner and Dmytro Sakharuk, senior associate, are prominent experts with significant experience in corresponding deals. Kharkov-based Inyurpolis has experience of developing cross-border intra-company financing schemes and support in the provision of loans by the Czech Export Bank. Olena Kibenko, the firm’s senior partner, is the leading expert in this area.

Analysis of international financial projects with the participation of Ukraine is also practiced in the Salkom law firm and is led by Yuriy Leonov.