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MKB Pays Coupon on Eurobonds CBOM-perp and CBOM-24 in Rubles

28.06.2022

Please be informed about the status of the 7.121% senior USD Notes due 25 June 2024 (ISIN - XS1964558339, US12504PAG54) (CBOM-24) and 8.875% subordinated perpetual USD Notes (ISIN - XS1601094755, US12504PAE07) (CBOM-perp) (together - “the Eurobonds” or the “Notes”) coupon payments.

Fulfillment of payment obligations under Eurobonds remains a priority for MKB. As advised earlier, the ability of the Bank, acting as the Borrower to make payments under the relevant loan agreements relating to the Eurobonds through the international financial infrastructure as it is stipulated in the bond issue documentation is still being limited due to the restrictive measures that the UK’s Office of Financial Sanctions Implementation (OFSI) imposed against MKB. Starting from 14 June 2022 MKB has been cut-off from the worldwide system for interbank financial telecommunication SWIFT.

In April 2022, MKB applied to the UK’s Office of Financial Sanctions Implementation (OFSI) for Treasury License allowing Bank and the Issuer complex servicing of Eurobond issues. MKB has not received the License at the moment. Without the abovementioned license the imposed sanctions regime makes technically impossible for MKB to process payments and for the paying agent to further deploy funds in favor of the Noteholders as provided for in the transaction documents, despite the fact that MKB owns all the necessary resources to service its debt.

At the same time MKB has to comply with the Russian legislation (The Executive Order of the President of the Russian Federation № 95 dated 5 March 2022) and to secure the payments in favour of the residents of the Russian Federation. Following this Decree MKB took the decision to separate payments in favour of Russian noteholders and international noteholders. On June 27, 2022, MKB paid coupons on Eurobonds CBOM-24 and CBOM-perp in Russian rubles at a relevant CBR rates in favour of the noteholders whose rights in respect of the Eurobonds are recorded with the National Settlement Depository in the order provided by the EO N95. The National Settlement Depository has received funds for the payment of coupon income on bonds. Once developed an appropriate approach and obtained permission by the Bank of Russia MKB will pay the part of a respective coupon in favour of the noteholders whose rights in respect of the Eurobonds are recorded with foreign clearing systems.

As far as more information will be received from OFSI, MKB will keep the noteholders informed of further developments. The noteholders have the right to reach out to the competent authorities of UK and EU on their own behalf.

For any additional information, please contact Investor Relations and Capital Markets team: capital_markets@mkb.ru