Current Report No. 82/2016: Conclusion of a senior notes issuance agreement

Further to Current Report No. 45/2016 of May 20th 2016 on the material binding agreement (Agreement) which was concluded between KRUK S.A.’s subsidiary i.e. ProsperoCapital S.a r.l. having its registered office in Luxembourg (ProsperoCapital), and entities of the Eurobank Group: respectively Bancpost S.A. and ERB Retail Services IFN S.A both having their registered offices in Bucharest, and its Dutch subsidiary ERB New Europe Funding II B.V. having its registered office in Amsterdam, (the Sellers), the subject of which is the acquisition of three portfolios of receivables with a nominal value of EUR 597m (the Receivables), the Management Board of KRUK S.A. (the Issuer) announces that on July 29th 2016 in order to finance the acquisition of the Receivables, ProsperoCapital  entered into a senior notes issuance agreement (the Notes Issuance Agreement).
The Notes Issuance Agreement was concluded between ProsperoCapital, the International Finance Corporation, a part of the World Bank Group, with its headquarters in Washington, DC, USA (IFC) and the Issuer’s subsidiary InvestCapital Malta Ltd. having its registered office in Malta (ICM) (both called Investors) to invest in senior notes (the Senior Notes). On the basis of the Notes Issuance Agreement ProsperoCapital  will issue Senior Notes in the registered form in an amount of up to RON 255m (PLN 249,5m according to NBP exchange rate of July 29th 2016). The proceeds will be applied towards payment of the purchase price (the Price) of the Receivables as well as any other expenses to be incurred by ProsperoCapital in accordance with the Notes Issuance Agreement. The Investors will subscribe for the Senior Notes towards payment of the  Price for the Receivables on a pro rata basis, which is 33 per cent. in respect of IFC and 67 per cent. in respect of ICM. The issuance of Senior Notes is conditional upon the Investors having confirmed to ProsperoCapital that all conditions precedent listed in the Notes Issuance Agreement have been met.
The maturity period of the Senior Notes is 72 months from the date falling in five business days after the subscription offer is given by ProsperoCapital (the Issue Date) or any later date agreed between ProsperoCapital and the Investors.
Interests on the Senior Notes will be paid to the Investors on a monthly basis. The amount of interests as well as principal repaid will depend on net cash flow from the collection of the Receivables and will be calculated in accordance with the formula stipulated in the Notes Issuance Agreement. 
In order to ensure management and collection of the Receivables, a servicing agreement between ProsperoCapital and the Issuer’s subsidiary KRUK Romania S.R.L. (KRUK Romania), as a servicer is going to be concluded (the “Servicing Agreement”). The fact of choosing KRUK Romania as a partner-servicer for the investment project was described by the Issuer in current report No 52/2015 of July 31st 2015.
The liabilities of ProsperoCapital under the Notes Issuance Agreement will be secured by:
a) a Luxembourg law governed bank account pledge agreement;
b) a Romanian law governed movable mortgage over: (i) the Receivables and the related rights to be acquired by ProsperoCapital, (ii) ProsperoCapital’s  rights and claims under the Servicing Agreement and (iii) each of ProsperoCapital’s bank account located in Romania, (iv) KRUK Romania’s bank accounts dedicated for collection of Receivables;
c) an English law governed deed of charge which is a first fixed security for the payment or discharge of  ProsperoCapital’s obligations under the Senior Notes
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