Naftogaz Pushes €1.2 Billion in Eurobond Debt Into the 2030s

Naftogaz Group has restructured two series of Eurobonds with a combined outstanding value of approximately €1.2 billion ($1.37 billion), securing approval from more than 90% of bondholders in each series, the company announced on July 14. The restructuring extends the maturity of the euro-denominated notes to January 2032 and the dollar-denominated notes to January 2033, giving Ukraine’s largest state energy company more time to repay its debt as Russian attacks continue to generate substantial repair and reconstruction costs.JOIN US ON TELEGRAMFollow our coverage of the war on the @Kyivpost_official. The transaction covers two issues placed through Kondor Finance plc, a UK-based special-purpose issuer: Euro-denominated loan participation notes with approximately €694.6 million outstanding, originally due in 2024 and previously extended to July 19, 2026 Dollar-denominated notes with approximately $583.8 million outstanding, originally due in 2026 and previously extended to Nov. 8, 2028 It is the second restructuring of the same debt. The previous rescheduling was agreed in July 2023. The agreement was completed in two stages. Naftogaz first reached an agreement in principle with an ad hoc group representing approximately 40% of each bond series. It then conducted a consent-solicitation process open to all eligible bondholders. Then-Naftogaz CEO Sergii Koretskyi, who was subsequently appointed Ukraine’s prime minister, said the agreement would allow the company to direct more resources toward restoring damaged infrastructure and preparing for the heating season. “The successful restructuring gives us greater flexibility to direct additional resources toward restoring infrastructure damaged by Russian attacks,” Koretskyi said. Other Topics of Interest Russian E-Commerce Prices Surge After Wildberries Strikes Goods on major Russian e-commerce platforms like Wildberries and Ozon have increased in price by up to 30% following extensive Ukrainian drone strikes on logistics facilities. Sergiy Fedorenko replaced Koretskyi as Naftogaz CEO on July 17. Russian attacks drive up financial pressure Naftogaz reached the agreement amid an intensifying Russian campaign against Ukraine’s gas production and energy infrastructure. In 2025, Russian forces attacked Naftogaz facilities 229 times—more than during the previous three years of the full-scale war combined. The pace accelerated further in 2026. Naftogaz reported more than 170 attacks by early June and approximately 250 by July 14. The strikes have damaged production and storage facilities, forced the company to spend heavily on repairs and increased the need for imported gas ahead of the 2026–2027 heating season. Naftogaz said the restructuring would help restore its liquidity, finance infrastructure repairs, build sufficient gas reserves and continue fulfilling its public-service obligations. The agreement also allows the company to reduce its immediate cash payments during the most financially difficult years of the war, although bondholders will receive a higher interest rate in exchange for accepting longer maturities. Richard Deitz, president of investment firm VR Capital, spoke on behalf of the ad hoc bondholder group when the preliminary agreement was announced in June. “The agreements provide the company financial space for continuing to fulfil its critical role while also respecting the legitimate commercial expectations of its bondholders,” Deitz said in the market announcement. Naftogaz continues $1.4 billion Gazprom recovery effort Alongside restructuring its liabilities, Naftogaz is continuing its international effort to recover more than $1.4 billion awarded against Russia’s Gazprom in arbitration proceedings. The Astana International Financial Centre Court initially recognized the arbitral award and authorized its enforcement in Kazakhstan on May 15. On July 7, however, the court revoked that authorization, finding that it lacked jurisdiction. Naftogaz said it would continue seeking recognition and enforcement in Kazakhstan while pursuing Gazprom assets in other jurisdictions. Gazprom’s outstanding debt continues to accrue interest until the award is fully enforced, according to Naftogaz. Key terms of restructuring The restructuring minimizes Naftogaz’s immediate cash outflows while increasing the total interest paid to bondholders. The coupon on both series rises to 8.95%, compared with the original rates of 7.125% on the euro notes and 7.625% on the dollar notes. Until mid-2028, part of that interest will be paid in cash and the remainder capitalized as payment-in-kind interest, adding it to the outstanding debt. Full cash interest payments begin in January 2029. The principal terms are: The euro notes mature on Jan. 15, 2032. The dollar notes mature on Jan. 15, 2033. Both series carry an annual coupon of 8.95%. The cash coupon is 6% through January 2028, rising to 6.5% in July 2028. The remaining interest is capitalized. From January 2029, the full 8.95% coupon is payable in cash. Bondholders receive an upfront consent fee equal to 1% of the principal amount of the euro notes and 0.5% of the dollar notes. Naftogaz may not pay dividends until the restructured notes are fully repaid, unless Ukrainian law requires it. The euro notes begin amortizing in January 2027. After initial repayments in January and July 2027, the remaining principal will be repaid in six equal semiannual installments beginning in July 2029. The dollar notes begin amortizing in July 2030, with semiannual repayments continuing until January 2033. Eighty percent of accrued but unpaid interest on the euro notes is to be paid in cash when the transaction is implemented. The remainder, along with all accrued interest on the dollar notes, will be capitalized. The notes are governed by English law and will be listed on a recognized stock exchange. The terms are based on the restructuring term sheet published on June 9. Naftogaz’s July 14 announcement confirming bondholder approval did not publish a revised term sheet. Naftogaz was advised by Norton Rose Fulbright and Aequo on legal matters and by Rothschild & Co and FinPoint on financial matters. The ad hoc bondholder group was advised by Cleary Gottlieb Steen & Hamilton and Ukrainian law firm Sayenko Kharenko. Olena Hrazhdan is the Business Reporter at Kyiv Post, covering Ukraine’s markets, business, and economic policy. While she reports broadly on economic issues, her core focus is banking, finance, monetary and fiscal policy. Olena previously wrote for leading Ukrainian business media and became a Fellow of the International Monetary Fund’s Journalism Fellowship in 2024.