Russian Agricultural Bank informs on the status of subordinated Eurobonds coupon yield payment

20 April 2022

Russian Agricultural bank (RusAg, the Bank) reports on the situation with subordinated Eurobonds coupon yield payable on 16 April 2022, with an interest rate of 8.5% per annum, maturing in 2023 (ISINs: XS0979891925, US74973DAJ81).

Due to sanctions imposed by the UK, on 16 April 2022 RusAg did not make the interest payment in the total amount of USD 21,250,000 in favor of the Eurobond Issuer RSHB Capital S.A. (Luxembourg) under the Subordinated Loan Agreement dated 11 October 2013 worth USD 500,000,000, with an interest rate of 8.5% per annum and maturity in 2023.

Considering the situation with interest payments on similar Eurobond issues by other Russian emitters, RusAg requested in advance a permission from the Bank of Russia to make a coupon payment in US dollars for the benefit of creditor, and also requested from the Eurobonds issue payment agent, the London branch of the Bank of New York Mellon, an appropriate payment instruction.

Due to the sanctions imposed by the UK Office of Financial Sanctions Implementation (OFSI) on 24 March 2022 against the Bank, the payment agent has not yet confirmed its readiness to accept payment from the bank and make interest payments to Euroclear / Clearstream / DTC depositories, and further to Eurobond holders until further instructions from the UK regulatory authorities are received.

RusAg, being a responsible and trustworthy borrower on the Russian and international capital markets, takes all necessary steps to resume coupon payments, continuing the dialogue with the payment agent in terms of obtaining a new license to service the loan, as well as works through other settlement methods with securities holders provided for, among other things, by Russian legislation.

The Bank confirms that it has sufficient liquidity to meet its obligations, including interest payments due on 16 April 2022, and makes every effort to service its debt.

Taking into account that the above measures aimed at paying interest may take additional time, we will inform Eurobond holders affected by these events of further actions related to payments on Eurobonds.