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NBU extends the term of foreign lender loans prepayment prohibition (extended)
Asters, Kyiv, Ukraine
Thursday, June 4, 2015
By its Resolution No. 354, effective as of 4 June 2015, the National Bank of Ukraine (the "NBU") extended the term of the prohibition of early repayment of loans provided by non-resident lenders until 3 September 2015 (inclusive).
According to Resolution No. 354, the NBU shall not register amendments to loan agreements with non-resident lenders reducing the term of fulfillment of the resident borrowers' obligations under such loan agreements or providing for early fulfillment of obligations thereunder.
The prepayment prohibition shall not apply if:
- the prepaid amounts are used to increase the capital of the bank acting as the borrower;
- the prepayment is made from the proceeds of the loan extended under the other cross-border loan agreement, provided that such a new loan agreement establishes a later maturity date (in whole or in part) compared to the previous loan agreement.
Furthermore, Resolution No. 354 reiterates, inter alia, the prohibition of:
- repatriation of proceeds received by foreign investors from the sale of Ukrainian issuers' securities outside the stock exchanges;
- repatriation of proceeds received by foreign investors from the sale of their corporate rights in legal entities, which are not documented as shares, or via reduction of Ukrainian entities' charter capitals or withdrawal from such entities;
- repatriation of dividends to foreign investors;
- making payments on the basis of NBU individual licenses (including investing outside of Ukraine), except for the following:
- crediting funds to legal entities' accounts opened abroad on the basis of NBU individual licenses;
- residents' payments under the guarantees/suretyships issued in connection with the loans provided by the international financial institutions or the financing involving foreign export credit agencies;
- local business entities' single or periodical payments on account of admission or members' fees in the foreign currency to maintain the operation of the foreign legal entities.
Previously, the aforementioned prohibitions were established by Resolution No. 160 as of 3 December 2014, which is no longer in effect.