Allen & Overy announced today that it has advised its longstanding client Ceska sporitelna, the Czech subsidiary of Erste Group Bank, in its role as the sole Dealer Manager, Lead Manager, Delivery Agent, Listing Agent and Fiscal and Paying Agent, on the unprecedented exchange and tender offers and issuance of Czech Koruna-denominated and Czech law-governed domestic bonds by NET4GAS, the Czech gas transmission operator.

NET4GAS has issued a CZK 2.64 billion (USD 119.43 million) bond due in 2025 in a deal which partially refinanced its outstanding debt and prolonged its liabilities, while the total outstanding debt remained unchanged. Investors swapped out of a 2021 bond via the exchange and tender offer managed by Ceska sporitelna.

The transaction is unique and truly innovative as it represents a first-of-its-kind exchange offer involving a switch from international notes (issued on the Eurobond market with 'XS' ISIN and cleared through Euroclear and Clearstream) into domestic bonds (issued and primarily settled locally into the Czech Central Depository with a 'CZ' ISIN and cleared as well as held outside the international clearing systems). This, com bined with the fact that a cash offer and issuance of additional new bonds were also involved, added significant complexity to the transaction and, in particular, to the way the participation and settlement mechanics were designed and structured. The new bonds were admitted to trading on a regulated market of the Prague Stock Exchange. 

Petr Jablonsky, Head of Treasury at NET4GAS commented upon completion: "Pioneering and challenging sometimes come together. We consider the end result a success and an example for other Czech issuers to possibly follow."

Tomas Cerny, Managing Director, Debt Capital Markets at Erste Group added: "Special thanks go to the NET4GAS team for their courage and willingness to proceed with this unique transactions as well as a smooth execution and excellent deal management."

The transaction was led out of Prague by an A&O team headed by senior associate Petr Vybiral, with support from associate Jana Chwaszcz (nee Svarickova) and junior lawyer Tomas Kafka. The A&O London team, led by senior partner Philip Smith and assisted by senior associate Louise Hennessey, provided English law advice.