Naftogaz to borrow USD 2 bln from Gazprombank
30 March 2012
Naftogaz of Ukraine (NAFTO) announced it will borrow USD 2.0 bln from Russia’s Gazprombank (42%-controlled by Gazprom) to purchase natural gas from Gazprom. Naftogaz reported it will pay USD 1.54 bln to service the debt over seven years, which implies an interest rate of 11%.
Vitaliy Vavryshchuk: The need for a sizable loan underlines Naftogaz’ shaky financial position. While the interest rate looks acceptable (state-guaranteed NAFTO’14 currently yields 10.6%), the loan increases the company’s financing costs by roughly 1/4. On a positive note, the USD 2.0 bln facility will improve Ukraine’s financial account against the backdrop of unsupportive conditions in external debt markets.
