“FINANCING of INFRASTRUCTURAL PROJECTS” (Incorporated As a State Enterprise Under the Laws of Ukraine)
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Level: 4 – From: 4 – Monday, November 1, 2010 – 06:16 – eprint6 – 4276 Intro State enterprise “FINANCING OF INFRASTRUCTURAL PROJECTS” (incorporated as a state enterprise under the laws of Ukraine) U.S.$568,000,000 8.375 per cent. Guaranteed Notes due 2017 guaranteed by The Cabinet of Ministers of Ukraine (acting on behalf of Ukraine) represented by the Minister of Finance of Ukraine The reoffer price to investors of the U.S.$568,000,000 8.375 per cent. Guaranteed Notes due 2017 (the “ Notes ”) of the State enterprise “FINANCING OF INFRASTRUCTURAL PROJECTS’’ (the “ Issuer ”) is 101.448 per cent. of their principal amount. Unless previously purchased, redeemed or cancelled, the Notes will be redeemed at their principal amount on 3 November 2017. The Notes will bear interest from 3 November 2010 at the rate of 8.375 per cent. per annum payable semi-annually in arrear on 3 May and 3 November each year commencing on 3 May 2011. Payments on the Notes will be made in U.S. dollars without deduction for or on account of taxes imposed or levied by Ukraine to the extent described under “ Terms and Conditions of the Notes—Taxation ”. The Cabinet of Ministers of Ukraine (acting on behalf of Ukraine) represented by the Minister of Finance of Ukraine (the “ Guarantor ”) will unconditionally and irrevocably guarantee the payment of all amounts at any time becoming due and payable in respect of the Notes. SEE “ RISK FACTORS ” FOR A DISCUSSION OF CERTAIN FACTORS TO BE CONSIDERED IN CONNECTION WITH AN INVESTMENT IN THE NOTES ON PAGES 8 to 23. The Notes and the Guarantee have not been and will not be registered under the United States Securities Act of 1933, as amended (the “ Securities Act ”), or with any securities regulatory authority of any State or other jurisdiction of the United States, and may not be offered or sold within the United States or to, or for the account or benefit of, any U.S. person except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. The Notes and the Guarantee will be offered and sold (i) outside the United States to persons that are not U.S. persons in reliance on Regulation S and (ii) within the United States in reliance on Rule 144A under the Securities Act (“Rule 144A ”) only to persons who are both (a) “qualified institutional buyers” (each a “ QIB ”) within the meaning of Rule 144A and (b) “qualified purchasers” (each a “ QP ”) within the meaning of Section 2(a)(51)(A) of the United States Investment Company Act of 1940, as amended (the “Investment Company Act ”), and the rules and regulations thereunder, in each case acting for their own account or for the account of one or more QIBs who are also QPs. Each purchaser of the Notes in making its purchase will be deemed to have made certain acknowledgements, representations and agreements. Prospective purchasers are hereby notified that the sellers of the Notes may be relying on the exemption from the provisions of Section 5 of the Securities Act provided by Rule 144A. For a summary of certain restrictions on resale, see “ Subscription and Sale ” and “ Forms of Notes and Transfer Restrictions ”. The Notes will be offered and sold in registered form in denominations of U.S.$100,000 and integral multiples of U.S.$1,000 in excess hereof. Notes which are offered and sold in reliance on Regulation S (collectively, the “ Unrestricted Notes ”) will each be represented by beneficial interests in a global Note (each, an “ Unrestricted Global Note ”) in registered form without interest coupons attached, which will be registered in the name of The Bank of New York Depository (Nominees) Limited, as nominee for, and shall be deposited on or about 3 November 2010 (the “ Closing Date ”) with, The Bank of New York Mellon, as common depositary (the “ Common Depositary ”) for, and in respect of interests held through, Euroclear Bank S.A./N.V. (“ Euroclear ”) and Clearstream Banking, société anonyme, Luxembourg (“ Clearstream, Luxembourg ”). Notes that are offered and sold in reliance on Rule 144A (collectively, the “ Restricted Notes ”) will each be represented by beneficial interests in a global Note (each, a “ Restricted Global Note ” and, together with the Unrestricted Global Notes, the “ Global Notes ”) in registered form without interest coupons attached, which will be deposited on or about the Closing Date with a custodian (the “ Custodian ”) for, and registered in the name of Cede & Co. as nominee for, The Depository Trust Company (“ DTC ”). Interests in the Restricted Global Notes will be subject to certain restrictions on transfer. Beneficial interests in the Global Notes will be shown on, and transfers thereof will be effected only through, records maintained by DTC, Euroclear and Clearstream, Luxembourg and their participants. Except as described herein, certificates will not be issued in exchange for beneficial interests in the Global Notes. The Prospectus has been approved by the Central Bank of Ireland (the “ Central Bank ”), as competent authority under Directive 2003/71/EC (the “ Prospectus Directive ”). The Central Bank only approves this Prospectus as meeting the requirements imposed under Irish and EU law pursuant to the Prospectus Directive. This Prospectus constitutes a “Prospectus” for the purposes of the Prospectus Directive. Application has been made to the Irish Stock Exchange for the Notes to be admitted to the official list (the “Official List ”) and trading on its regulated market (the “ Market ”). The Market is a regulated market for the purposes of Directive 2004/39/EC (the “ Markets in Financial Instruments Directive ”). Lead Manager MORGAN STANLEY 1 November 2010 Level: 4 – From: 4 – Monday, November 1, 2010 – 06:16 – eprint6 – 4276 Intro CONTENTS Page CERTAIN IMPORTANT INFORMATION.................................................................................. 3 OVERVIEW.................................................................................................................................. 6 RISK FACTORS .......................................................................................................................... 8 TERMS AND CONDITIONS OF THE NOTES ........................................................................ 24 USE OF PROCEEDS.................................................................................................................... 36 DESCRIPTION OF THE ISSUER .............................................................................................. 37 DESCRIPTION OF THE AGENCY ............................................................................................ 38 DESCRIPTION OF NSC OLYMPIC .......................................................................................... 41 DESCRIPTION OF THE LVIV DIRECTORATE ...................................................................... 44 DESCRIPTION OF THE GUARANTOR.................................................................................... 47 POLITICAL FRAMEWORK ...................................................................................................... 52 ECONOMY OF UKRAINE ........................................................................................................ 73 THE LABOUR MARKET .......................................................................................................... 109 EXTERNAL SECTOR ................................................................................................................ 116 PUBLIC FINANCE AND FISCAL POLICY .............................................................................. 128 PUBLIC DEBT ............................................................................................................................ 142 THE MONETARY SYSTEM ...................................................................................................... 162 THE BANKING SYSTEM AND SECURITIES AND FINANCIAL SERVICES MARKETS IN UKRAINE .............................................................................................................................. 173 TAXATION .................................................................................................................................. 188 FORM OF NOTES AND TRANSFER RESTRICTIONS .......................................................... 194 SUBSCRIPTION AND SALE...................................................................................................... 203 GENERAL INFORMATION ...................................................................................................... 205 ANNEX - FORM OF DEED OF GUARANTEE ........................................................................ 207 INDEX OF DEFINED TERMS.................................................................................................... 216 2 Level: 4 – From: 4 – Monday, November 1, 2010 – 06:16 – eprint6 – 4276 Intro CERTAIN IMPORTANT INFORMATION Except for the Guarantor Information (as defined below), the Issuer accepts responsibility for the information contained in this Prospectus. To the best of the knowledge of the Issuer (having made all reasonable enquiries and having taken all reasonable care to ensure that such is the case) the information contained in this Prospectus, aside from the Guarantor Information (as defined below), is in accordance with the facts and does not omit anything likely to affect the import of such information. The Guarantor accepts responsibility for the information with respect to it and Ukraine, including but not