Meeting of Bondholders on 28 November 2016

Notice is hereby given by the Issuer that, pursuant to the provisions of Annex 1 of the terms and conditions of the Bonds (the "Conditions"), a meeting (the "Meeting") of the Bondholders will be held on 28 November 2016 at 10.00a.m. (Icelandic time) at Hotel Hilton Nordica, Suðurlandsbraut 2, 108 Reykjavik, Iceland, for the purposes of considering and if thought fit, passing the resolution set out below, which will be proposed as an Extraordinary Resolution (the "Extraordinary Resolution") in accordance with the provisions of the Trust Deed (as defined below).

Capitalised terms used and not otherwise defined in this notice (the "Notice") shall have the meanings given to them in the Conditions of the Bonds set out in Schedule 1 to the trust deed dated 23 March 2016 (the "Trust Deed") between the Issuer, Wilmington Trust (London) Limited (the "Trustee") and Wilmington Trust, National Association (the "U.S. Trustee"). The Schedule 1 to the trust deed can be found here.

Background to the convening of the Meeting: Proposed Amendments to the Terms and Conditions of the Bonds to Facilitate Certain Payments to Bondholders

The Issuer proposes certain amendments (the "Proposed Amendments") be made to the Conditions by way of a deed supplemental to the Trust Deed (the "First Supplemental Trust Deed"), to be entered into between the Issuer, the Trustee and the U.S. Trustee in or substantially in the form set out in Annex 1 (Form of First Supplemental Trust Deed) to this Notice, forthwith upon the passing of the Extraordinary Resolution by the requisite majority of Bondholders.  The Proposed Amendments would:

  • (a)  permit the Issuer to make payments of principal on the Bonds to the Bondholders on 15 June and 15 December of each year until the Final Maturity Date.  Currently, the Issuer is required to make payments on 30 June and 31 December of each year pursuant to the definition of "Payment Date" in Condition 2.1 of the Bonds;

  • (b)  amend the "Currency Conversion Date" in relation to the date on which the Issuer makes an unscheduled payment in respect of the Bonds pursuant to Condition 9.2 (Unscheduled Payments) (an Unscheduled Payment Date) to six Business Days prior to that Unscheduled Payment Date. Currently, the Currency Conversion Date for any Unscheduled Payment Date is four Business Days prior to that Unscheduled Payment Date; and

  • (c)  amend the "First Notification Date", which is the date on which the Issuer is to notify the Bondholders of its estimate of Euro Equivalent Available Cash (if any) which will be applied in partial redemption of the Bonds on a Payment Date, in relation to an Unscheduled Payment Date to nine Business Days before that Unscheduled Payment Date. Currently, the First Notification Date for any Unscheduled Payment Date is seven Business Days prior to that Unscheduled Payment Date.

The nature of the Proposed Amendments requires that they be approved by an Extraordinary Resolution of the Bondholders, in accordance with paragraph 8 of Annex 1 to the Conditions.

The Board of Directors of the Issuer believes that the proposed amendments to the defined terms "Payment Date", "Currency Conversion Date" and "First Notification Date" would facilitate repayments of principal on the Bonds and better align the Payment Dates and Unscheduled Payment Dates with the related cash flows and administrative procedures necessary for the Issuer to undertake in order to calculate the amounts payable on the Bonds on each Payment Date or Unscheduled Payment Date, and that the Proposed Amendments are in the best interests of both the Issuer and the Bondholders.  The proposed amendment to the defined term "Payment Date" will mean that the First Notification Date in relation to the 15 December 2016 Payment Date will occur earlier than would have been the case prior to that amendment.

The official notification for the meeting can be found here.

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