Naftogaz starts Eurobond roadshow

Ukraine’s leading natural gas company Naftogaz started
roadshow of five-year EUR-denominated Eurobond issue in London and Frankfurt on
July 8, Interfax-Ukraine reported the same day. The issue is managed by Citi
and Deutsche Bank.

“Naftogaz is looking forward for the resolution of
Cabinet of Ministers on Eurobonds placement in order to provide natural gas
bulk purchase, form gas reserves and start successful negotiations with
Russia’s Gazprom”, Naftogaz CEO Andriy Kobolev said last week, Interfax-Ukraine
reported.

Recall, Naftogaz postponed its Eurobond issue
in November because of unfavorable market
conditions. Then, the initial pricing of the bonds was at the 10.9% level,
indicating its total subscription book of about USD 700 mln.

Evgeniya Akhtyrko: Naftogaz’s
decision on going forward with Eurobonds placement is in line with our recent prediction.
Given successful last week placement another quasi-sovereign issue by Ukrainian
Railway (RAILUA), Naftogaz is likely to achieve its goal. We estimate the new
bond will be priced at 7%-7.5% YTM.