A total of over 50 issues of corporate bonds of about 30 issuers had to be redeemed from the beginning of 2022 to mid-2023, some of them were restructured, but not a single default on bonds has been recorded, said Maxim Libanov, a member of the National Commission on Securities and Stock Market (NCSSM) of Ukraine.
“If we compare the situation in 2022 with the situation in 2008-09, in general we can say that the market has matured, and – all participants. As of now, there are no defaults,” he said at the USAID conference “Debt Instruments to Support Recovery” held recently in Kyiv.
Mr. Libanov specified that the matter concerns both traditional interest-bearing and discount corporate bonds and construction target bonds.
According to him, the issue was partially resolved by the Commission’s decision to extend the fulfillment of obligations until the end of wartime, as the commissioning of construction projects during this period is objectively complicated.
As stated by the member of the NCSSM, it gave a good result: several issuers, whose construction should have been completed in 2022 or early 2023, “calmly” complete it, including even in Kharkiv.
As Libanov stated, the regulator’s position is not to interfere in the relations between the issuer and investors while they are trying to reach an agreement, and if they have reached it, to fix it as quickly and easily as possible. According to him, in one of the last cases it took a week to formalize the restructuring in the Commission.
He noted that the SEC facilitated the restructuring process by launching a system, which allows holding meetings of bondholders, jointly with the National Depository.
As the member of the Commission specified, if we set aside the target bonds, then out of a little more than 10 issuers of corporate debt, eight have restructured: half of them used the meeting of bondholders through the National Depository, and the other half, due to a small number of investors, received written personal consent from all of them.
Speaking about the plans, Libanov said that the SECP is working to finalize the legislative framework for sustainable development bonds or ESG-bonds, which include green bonds.
He added that the Commission is also studying quasi-corporate and quasi-debt instruments, in particular finalizing a pilot project on loan notes.
According to the Commission member, the regulator is also working with the EBRD on securitization and secured bonds. “We have approved the concept, now we are working on the draft law. I hope that somewhere in the fall we will be able to show the first version,” Libanov specified.
