Naftogaz Ukrainy

Naftogaz reached an agreement in principle on the key restructuring terms for its EUR 695m Eurobonds maturing in July 2026 and $584m bond due in 2028 with an ad hoc group of bondholders representing approximately 40% of the two series. The proposal envisages amortization of the 2026 Eurobond principal over 2027-2032 and that of the 2028 Eurobond over 2030-2033. For the 2026 Eurobond, 80% of coupon accrued between Jul. 19, 2024 and the transaction date will be paid in cash on the transaction date, while the remaining 20% will be capitalized together with any coupon outstanding on the transaction date. For the 2028 bond, coupon accrued since May 8, 2026 will be fully capitalized. The coupon rate on both bonds will increase to 8.95% (from 7.125% on the 2026 notes and 7.625% on the 2028 notes) and will be split between cash and PIK components (see table below for details). The proposal also includes a 1.0% consent fee for holders of the 2026 bonds and a 0.5% fee for holders of the 2028 bonds. The covenants for both bonds will be relaxed to allow additional borrowing from IFIs regardless of the company’s consolidated leverage ratio. Dividend payments will be prohibited until the Eurobonds are fully repaid, unless required by law. The company will also be required to maintain a rating on the restructured bonds from at least one rating agency.

Local subsidiaries of Naftogaz have published their 1Q26 financial results under Ukrainian Accounting Standards (UAS), reporting combined EBITDA of $365m, down 24% q-o-q and 10% y-o-y. Their combined cash position declined to $314m by end-1Q26, from $395m at end-2025, while total debt fell to $3.4bn from $3.8bn.