KIEV, Oct. 19 - Naftogaz Ukrayiny, the national oil and gas company, reported on Monday that 93% of investors holding its $500 million eurobond had agreed to swap the debt into a new five-year eurobond.

Naftogaz, which is facing financial crunch this year, has also made progress in talks over restructuring of its other debt obligations, the company said.

“The company is happy with the constructive mode of the talks,” Naftogaz said in a statement.

The development is a victory for Naftogaz, which needed consent from more than 75% of bondholders in order to go ahead with the debt swap.

Naftogaz is the main shipper of Russian natural gas to markets in the European Union.

Credit Suisse has been helping Naftogaz to restructure the debt, according to the company.

Naftogaz was supposed to redeem the $500 million five-year eurobond on Sept. 30, but instead paid a $20 million coupon and requested the bond holders restructure the debt for another five years.

Naftogaz has been seeking to swap the $500 million eurobond and other debts into a $1.65 billion eurobond that will be issued to absorb the debt and will be backed by the sovereign guarantee of the Ukrainian state.

Other debts apparently include $395 million loan from Deutsche Bank, $550 million loan from Credit Suisse International and $220 million loan from Depha Bank, a person familiar with the situation said.

The new bond, denominated in US dollars, is to pay 9.5% coupon annually and will mature on September 30, 2014, compared with 8.125% coupon paid by the Eurobond that was due to mature on September 30, according to Naftogaz.

“A meeting of bond holders has taken place in London on October 19,” Naftogaz reported in the statement. “As a result of a vote, more than 93% of bondholders have supported the swap program.”

The swap transaction is expected to take place on October 29, 2009, Naftogaz said.

Naftogaz faces financial crunch and was forced to repeatedly resort to emergency borrowing from the National Bank of Ukraine to make gas payments to Russian gas giant Gazprom earlier this year in order to avoid penalties. (sb/ez)