PAO Sovcomflot Reopens Eurobonds Issued in 2016 and 2010

May 15, 2017

Cleary Gottlieb represented Sovcomflot in a $150 million reopening of its $750 million Eurobond issued in 2016, on which Cleary also advised Sovcomflot, bringing the total outstanding amount of the Eurobond to $900 million.

Cleary also advised on the mandatory redemption of the remainder of Sovcomflot’s $800 million Eurobond issued in 2010.

Like the $750 million 5.375 percent Eurobond due 2023 issued in 2016, the new $150 million Eurobond was issued by SCF Capital Designated Activity Company (formerly SCF Capital Limited) and guaranteed by PAO Sovcomflot, and it has been admitted to the official list and to trading on the regulated market of the Irish Stock Exchange. The new offering priced on April 3, 2017, signed on April 6, 2017, and closed on April 10, 2017. On the heels of this offering on May 15, 2017, Sovcomflot exercised its call option to repurchase the remainder of its $800 million Eurobond issued in 2010 and due in Fall 2017.

The reopening of the new Eurobond and the mandatory redemption of the old Eurobond mark the completion of a series of transactions, spanning over a year, designed to extend the maturity of Sovcomflot’s public debt from 2017 to 2023. The proceeds of the Eurobond issued in 2016 were used to refinance certain of Sovcomflot’s indebtedness, including by way of a tender offer for the repurchase of approximately $660 million of Sovcomflot’s then-existing $800 million Eurobond issued in 2010 and due 2017. The proceeds of the Eurobond issued in 2017 were used to finance the mandatory redemption of the remainder of that $800 million Eurobond.

Sovcomflot is the largest shipping group in Russia and possesses the largest fleet of oil tankers in the world.  It is wholly owned by the Russian Federation and is included on the Russian Federation’s list of strategic enterprises and organizations. Sovcomflot’s core business is providing leading oil and gas companies with vessels for servicing offshore oil and gas installations and for the worldwide seaborne transportation of crude oil, oil products and liquefied gas. Sovcomflot specializes in the operation of ice-class vessels.