Bulgarian Energy Holding EAD
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Bulgarian Energy Holding EAD (incorporated with limited liability in the Republic of Bulgaria, with registered number 831373560) EUR 150,000,000 3.500 per cent. Bonds due 2025 (to be consolidated and form a single series with the EUR 400,000,000 3.500 per cent. Bonds due 2025 issued on 28 June 2018) Issue Price 100 per cent. (plus 33 days’ accrued interest in respect of the period from (and including) 28 June 2018 to (but excluding) the Issue Date (as defined below)) The EUR 150,000,000 3.500 per cent. Bonds due 2025 (the “Bonds”, which expression, when used in “Terms and Conditions of the Bonds” and, where the context so permits, in other sections of this Prospectus (the “Prospectus”) where the terms and conditions of the Bonds and the Original Bonds (as defined below) are described, includes the Original Bonds and, unless the context otherwise requires, any further bonds issued pursuant to Condition 13 – “Terms and Conditions of the Bonds – Further Issues”) will be issued by Bulgarian Energy Holding EAD (the "Issuer" or "BEH") on 31 July 2018 (the “Issue Date”). On issue, the Bonds will be consolidated and form a single series with the existing EUR 400,000,000 3.500 per cent. Bonds due 2025 (the “Original Bonds”) of the Issuer issued on 28 June 2018. Upon such consolidation, the aggregate principal amount of the Original Bonds and the Bonds will be EUR 550,000,000. Interest on the Bonds is payable annually in arrear on 28 June in each year, commencing on 28 June 2019. Except as described under "Terms and Conditions of the Bonds – Taxation", payments in respect of the Bonds will be made without any deduction or withholding for or on account of any taxes of Bulgaria. Unless previously redeemed or purchased and cancelled, the Bonds will be redeemed at their principal amount on 28 June 2025. The Bonds are subject to redemption, in whole but not in part, at their principal amount (together with interest accrued to the date fixed for redemption), at the option of the Issuer at any time in the event of certain changes affecting taxation in the Republic of Bulgaria. See "Terms and Conditions of the Bonds". Upon the occurrence of a Change of Control (as defined in Condition 6(c) of the Terms and Conditions of the Bonds), each Bondholder shall have the option to require that the Issuer redeem (or at the option of the Issuer, purchase (or procure the purchase of)) such Bondholder's Bonds at 101 per cent. of the principal amount thereof plus accrued and unpaid interest, if any, to (but excluding) the Change of Control Put Date (as defined in Condition 6(c) (Change of Control Put Option) of the Terms and Conditions of the Bonds). The Bonds will constitute direct, general, unconditional, unsecured and unsubordinated obligations of the Issuer. See "Terms and Conditions of the Bonds". Unless a Change of Control Put Notice has been given pursuant to Condition 6(c) (Change of Control Put Option) of the Terms and Conditions of the Bonds, the Issuer may, at any time, redeem, in whole or in part, the Bonds at a redemption price per Bond equal to the higher of: (i) the principal amount of the Bond; and (ii) the sum of the then current values of the remaining scheduled payments of principal and interest discounted to the Optional Redemption Date on an annual basis (based on the actual number of days elapsed divided by 365 or (in the case of a leap year) by 366) at the Reference Dealer Rate (as defined herein) plus 0.5 per cent., in each case as determined by the Determination Agent (as specified in Condition 6(d) (Redemption at the Option of the Issuer) of the Terms and Conditions of the Bonds). This Prospectus has been approved by the Central Bank of Ireland (the "Central Bank"), as competent authority under Directive 2003/71/EC (and amendments thereto, including Directive 2010/73/EU) (the "Prospectus Directive"). The Central Bank only approves this Prospectus as meeting the requirements imposed under Irish and European Union law pursuant to the Prospectus Directive. Such approval relates only to the Bonds which are to be admitted to trading on a regulated market for the purposes of Directive 2014/65/EU, as amended or which are to be offered to the public in any Member State of the European Economic Area. The Issuer intends to notify this Prospectus in accordance with the Prospectus Directive to the Bulgarian Financial Supervision Commission as the competent authority of the host member state where the Bonds are to be subsequently intended by the Issuer to be admitted to trading on a regulated market. Each of the regulated market of the Irish Stock Exchange plc trading as Euronext Dublin ("Euronext Dublin") and the regulated market of the Bulgarian Stock Exchange ("BSE") is a regulated market for the purposes of Directive 2014/65/EU, as amended. Application has been made to Euronext Dublin for the Bonds to be admitted to the official list of Euronext Dublin (the "Official List") and trading on Euronext Dublin. Following the admission to the Official List, the Issuer intends to apply for subsequent admission of the Bonds to the main market of the BSE (the "Bulgarian List") and trading on its regulated market. The Bonds have not been and will not be registered under the United States Securities Act of 1933, as amended (the "Securities Act") or any U.S. State securities laws and may not be offered or sold in the United States unless an exemption from the registration requirements of the Securities Act is available and in accordance with all applicable securities laws of any state of the United States and any other jurisdiction. The Bonds shall be in registered form in denominations of EUR 100,000 and integral multiples of EUR 1,000 in excess thereof. The Bonds will initially be represented by a new global certificate (the "New Global Certificate"), without interest coupons, which will be issued and delivered on or prior to the Issue Date to, and registered in the name of, a nominee for a common depositary (the "Common Depositary") for Euroclear Bank SA/NV ("Euroclear") and Clearstream Banking, S.A.("Clearstream, Luxembourg"). The New Global Certificate shall also, from the Issue Date, represent interests in the Original Bonds as initially represented by a global certificate dated 28 June 2018 (the “Original Global Certificate”). Interests in the New Global Certificate will be shown on, and transfers thereof will be effected only through, records maintained by Euroclear and Clearstream, Luxembourg and their respective participants. Individual bond certificates in definitive form (the "Individual Bond Certificates") evidencing holdings of Bonds will only be available in certain limited circumstances. See "Summary of Provisions Relating to the Bonds While in Global Form". The Original Bonds were assigned a rating of BB by Fitch Ratings Limited ("Fitch") and Ba2 by Moody's Investors Service, Ltd. ("Moody's"), and it is expected that the ratings of the Bonds will be the same, after the issuance of the Bonds. Both Fitch and Moody's are established in the European Union and registered under Regulation (EC) No 1060/2009 as amended by Regulation (EU) No 513/2011 (the "CRA Regulation") and are included in the list of credit rating agencies published by the European Securities and Markets Authority on its website in accordance with the CRA Regulation. A rating is not a recommendation to buy, sell or hold securities and may be subject to suspension, reduction or withdrawal at any time by the assigning rating agency. Prospective investors should have regard to the factors described under the section headed "Risk Factors" in this Prospectus. Sole Bookrunner and Lead Manager Citigroup Global Markets Limited Co-Manager First Financial Brokerage House Ltd. The date of this Prospectus is 27 July 2018. 1 MiFID II product governance/Professional investors and Eligible Counterparties only target – Solely for the purposes of each manufacturer's product approval process, the target market assessment in respect of the Bonds has led to the conclusion that: (i) the target market for the Bonds is eligible counterparties and professional clients only, each as defined in Directive 2014/65/EU (as amended, "MiFID II"); and (ii) all channels for distribution of the Bonds to eligible counterparties and professional clients are appropriate. Any person subsequently offering, selling or recommending the Bonds (a "distributor") should take into consideration the manufacturers' target market assessment; however, a distributor subject to MiFID II is responsible for undertaking its own target market assessment in respect of the Bonds (by either adopting or refining the manufacturers' target market assessment) and determining appropriate distribution channels. PRIIPs Regulation/Prohibition of sales to EEA retail investors – The Bonds are not intended to be offered, sold or otherwise made available to and should not be offered, sold or otherwise made available to any retail investor in the European Economic Area ("EEA"). For these purposes, a retail investor means a person who is one (or more) of: (i) a retail client as defined in point (11) of Article 4(1) of MiFID II; or (ii) a customer within the meaning of Directive 2002/92/EC (as amended, the "Insurance Mediation Directive"), where that customer would not qualify as a professional client as defined in point (10) of Article 4(1) of MiFID II. Consequently no key information document required by Regulation (EU) No 1286/2014 (as amended, the "PRIIPs Regulation") for offering or selling the Bonds or otherwise making them available to retail investors in the EEA has been prepared and therefore offering or selling the Bonds or otherwise making them available to any retail investor in the EEA may be unlawful under the PRIIPs Regulation.