Ukraine's Naftogaz Sells $500mn in Eurobonds

Ukraine’s national gas company Naftogaz has returned to the international bond market, placing $500mn in seven-year Eurobonds, it announced on November 5.

The bonds carry an interest of 7.625%, Naftogaz said, payable on a semi-annual basis. The order book oversubscribed by almost 2.9 times, attracting investors from the UK, Switzerland, Germany and elsewhere in the EU, as well as from the US, Asia and the Middle East.

“We are inspired with investors’ high interest in Naftogaz’s securities,” CEO Andriy Kobolyev said in a statement. “Our efforts to reform the company and the Ukrainian gas market help us reduce our financing costs and compete more effectively.”

Naftogaz expects to obtain funds from the sale on November 8, pending completion of legal formalities. Citi served as the issue's bookrunner, while Freshfields Bruckhaus Deringer, AEQUO, White & Case, Avellum, Linklaters, Allen & Overy acted as legal advisors.

Naftogaz sold more than $1bn in euro and dollar-denominated bonds with durations of five and three years respectively in July. The company said at the time that the proceeds would help it store gas in preparation for winter.