Ukraine to borrow ~USD 3 bln on local and foreign markets in December, PM says

The Ukrainian government is planning to borrow UAH
50-60 bln on the domestic market and issue Eurobonds for USD 1 bln in December,
PM Denys Shmyhal told the korrespondent.net news site in an interview published
on Dec. 2. This amount will be enough to cover the state budget’s financing gap
for 2020, he said. Shmyhal estimated the cost of local currency borrowing could
reach 13%.

Recall, this week, MinFin placed local bonds for UAH
2.7 bln (3M to 3Y) at the rates of 9.9%-11.6%.

Alexander Paraschiy: Ukraine
placed local bonds for a net value of UAH 48.4 bln year-to-date, which makes
the placement of another UAH 60 bln (in addition to the need to refinance UAH
20.9 bln in maturing bonds) during the remainder of December an impossible
task. Meanwhile, the positive news is that the prime minister understands the
necessity to significantly raise placement rates on domestic bonds, which could
be helpful in at least partially fulfilling his announced plan.

At the same time, we believe it is much more
affordable for the government to place international bonds in an amount exceeding
the announced USD 1 bln. To make the placement smooth, the government has to
secure some positive message from the IMF on the clear prospects for its SBA
program with Ukraine: at least a scheduled mission for the first review of the
program, or ideally (but unlikely by mid-December) a first review of the
program performed at the staff level.