Baltic Horizon Fund requests for partial early redemption and temporary waiver under the bond terms and conditions

Baltic Horizon Fund (the Issuer) 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 22,000,000 as Baltic Horizon Fund has mandatorily redeemed Bonds in nominal amount of EUR 20,000,000 as foreseen under the terms and conditions of the Bonds (Terms and Conditions).

In the light of the current situation of Baltic economies, the outlook for next year as well as the associated effects on the fund, Baltic Horizon Fund has decided to request the holders of the Bonds (the Holders) to amend and lower the debt service coverage ratio covenant in the Terms and Conditions for a period of 24 months starting from 30 September 2024 until 30 September 2026. 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 stipulate an additional obligation for mandatory early redemption of the Bonds concerning total nominal amount of EUR 3,000,000  by 7 November 2025.

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 25 September 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:

1. 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 29 September 2024 (inclusive), (iii) is above zero point seventy five (0.75) for the period of 30 September 2024 (inclusive) until 30 June 2025 (inclusive), (iv) is above one point zero (1.00) for the period of 1 July 2025 (inclusive) until 30 September 2026 (inclusive), and (v) thereafter as of 1 October 2026 is above one point twenty (1.20);
2. to amend the undertaking set out in Clause 12.4.1 and to stipulate an additional obligation for mandatory early redemption of the Bonds under Clause 12.4.1(c) of the Terms and Conditions concerning Bonds with a total nominal value of EUR 3,000,000 by 7 November 2025;
3. to introduce an amendment fee to the Terms and Conditions payable by the Issuer to the Holders for granting consent to request no 1 as described above in total amount of EUR 95,000 (i.e., total amount payable to all Holders jointly) and payable within 10 business days as of the decision for the amendment of the Terms and Conditions.
4. to introduce an amendment fee to the Terms and Conditions payable by the Issuer to the Holders for granting consent to request no 2 as described above in total amount of EUR 200,000 (i.e., total amount payable to all Holders jointly) and payable together with the completion of the additional mandatory early redemption (i.e., at or before 7 November 2025).

Voting can be carried out by sending the filled-in voting form to the Agent by mail, courier or e-mail no later than 23:59 (EET) of 1 October 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.

For additional information, please contact:

Tarmo Karotam
Baltic Horizon Fund manager
E-mail tarmo.karotam@nh-cap.com
www.baltichorizon.com

Baltic Horizon Fund is a registered contractual public closed-end real estate fund managed by Alternative Investment Fund Manager license holder Northern Horizon Capital AS. Both the Fund and the Management Company are supervised by the Estonian Financial Supervision Authority.

Distribution: Nasdaq, GlobeNewswire, www.baltichorizon.com

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