Baltic Horizon Fund applies for temporary waiver of debt service coverage ratio covenant in relation to Baltic Horizon Fund EUR 42 million 5-year floating rate bonds maturing in 2028 (ISIN EE3300003235, the Bonds). The current outstanding nominal amount of the Bonds is EUR 34,499,997 and according to the terms and conditions of the Bonds (the Terms and Conditions) Baltic Horizon Fund is to mandatorily redeem Bonds in outstanding nominal amount of EUR 12,499,997 by 8 May 2024.
In the light of the current situation of Baltic economies, high EURIBOR as well as the outlook for next year and the associated effects on the fund Baltic Horizon Fund has decided to request the holders of the Bonds (the Holders) to amend and temporarily lower the debt service coverage ratio covenant in the Terms and Conditions for a period of 12 months starting from 1 January 2024 until 31 December 2024. Baltic Horizon Fund confirms to all Holders that its ability to fulfil the monetary obligations provided in the Terms and Conditions has not been affected.
Baltic Horizon Fund also applies for a consent to prolong the deadline for completion of the mandatory early redemption concerning the Bonds in the total nominal amount of EUR 8,000,000 until 8 July 2024. For the avoidance of doubt, this means that Baltic Horizon Fund undertakes to redeem the remaining part of the Bonds to be redeemed under mandatory early redemption (in a total nominal amount of EUR 4,499,997) shortly but not later than by 8 May 2024.
Further, the issuer is requesting consent from the Holders to amend the regulation in the Terms and Conditions governing release of the collateral of the Bonds after mandatory early redemption of the Bonds has been fully completed.
Northern Horizon Capital AS as the fund manager has been in contact with the Holders and received preliminary consent for the requested amendments which is now to be confirmed in the official Holders’ written consent procedure in accordance with the Terms and Conditions.
Holders who were entered in the registry of bond-holders maintained by Nasdaq CSD SE on the preceding business day before initiation of the written procedure, i.e. at the end of business of Nasdaq CSD SE on 12 March 2024, are entitled to vote in the written procedure. All Holders are sent a notice by Triniti Collateral Agent IX OÜ acting as the agent for Holders (the Agent).
The consents the Holders are requested to grant are the following:
- to amend the undertaking set out in Clause 13.3.1(b) of the Terms and Conditions in the following wording: the Debt Service Coverage Ratio of the Group (i) is above one point ten (1.10) until 31 December 2023 (inclusive), (ii) is above zero point eighty five (0.85) for the period of 1 January 2024 (inclusive) until 31 December 2024 (inclusive) and (iii) thereafter as of 1 January 2025 is above one point twenty (1.20);
- to prolong the deadline for completion of mandatory early redemption as stipulated in Clause 12.4.1 of the Terms and Conditions concerning the Bonds in the amount of EUR 8,000,000 to 8 July 2024;
- to amend Clause 10.2 of the Terms and Conditions and stipulate that the release of the collateral of the Bonds is solely subject to the completion of the mandatory early redemption as stipulated in Clause 12.4 (as amended) of the Terms and Conditions and the other preconditions for the release of collateral of the Bonds as set out currently in Clause 10.2 will be removed;
- to introduce amendment fee to the Terms and Conditions payable by the Baltic Horizon Fund to the Holders for granting consent to the requests 1 – 3 as described above in total amount of EUR 80,000 (i.e., total amount payable to all Holders jointly) whereas amendment fee is payable upon completion of the mandatory early redemption in full (i.e., on or before 8 July 2024).
Voting can be carried out by sending the filled-in voting form to the Agent by mail, courier or e-mail no later than 12:00 (EET) of 20 March 2024. The notice sent by the Agent along with the voting instructions, the voting form and template Power of Attorney are attached.
For the quorum to be reached and the resolution taken the Holders representing at least 55% of the nominal amount of the Bonds should vote and Holders representing at least 2/3 of the nominal amount of the Bonds participating in the voting need to be in favour of the decision. Once a requisite majority of consents have been received by the Agent, the relevant decision shall be deemed to be adopted, even if the time period for replies has not yet expired. Information about the decision taken will be sent by notice to the Holders, published on the website of Baltic Horizon Fund and published by way of stock exchange release. If the request is approved by the Holders it will be binding on all Holders whether they participated in the voting or voted against the request or not, in accordance with Clause 16.12 of the Terms and Conditions.
