Change in Terms for Public Debt: Reorganization of PAO TMK
2025-2026
Debt Management
Key aspects
In 2024, LECAP successfully supported PAO TMK in the exchange of its eurobonds through the issuance of U.S. dollar-denominated bonds.
In 2025, PAO TMK decided to reorganize by way of the merger of its subsidiaries into itself.
The law grants creditors, including bondholders, the right to demand early performance of the debtor’s obligations in the event of its reorganization, unless otherwise provided by the terms of the debt.
In the context of high interest rates, the market value of PAO TMK’s bonds was significantly below par, which motivated investors to demand early performance of the bond obligations.
As part of the project, investors’ consent was obtained to amend the bond terms and conditions in order to eliminate the right to demand early performance in the event of an intragroup reorganization.
In 2025, PAO TMK decided to reorganize by way of the merger of its subsidiaries into itself.
The law grants creditors, including bondholders, the right to demand early performance of the debtor’s obligations in the event of its reorganization, unless otherwise provided by the terms of the debt.
In the context of high interest rates, the market value of PAO TMK’s bonds was significantly below par, which motivated investors to demand early performance of the bond obligations.
As part of the project, investors’ consent was obtained to amend the bond terms and conditions in order to eliminate the right to demand early performance in the event of an intragroup reorganization.
Establishing the issuer’s ability, subject to bondholders’ approval, to include a waiver by the latter of the right to demand early redemption in the event of the issuer’s reorganization
LECAP’s Scope of Work
As part of the project support, LECAP obtained clarifications from the Bank of Russia and the Moscow Exchange regarding the possibility of registering amendments to the terms and conditions of bonds providing for a waiver of early redemption within an intragroup reorganization.
The amendments to the bond terms and conditions submitted to the general meeting for a vote provided for the payment of additional income in the amount of 1% of the face value. This encouraged investors to vote in favor of the amendments.
Project Significance
Establishing the issuer’s ability, subject to bondholders’ approval, to include a waiver by the latter of the right to demand early redemption in the event of the issuer’s reorganization.
Key product modules used in implementing the project
All products