Government to repay half of USD 2 bln VTB loan today
6 June 2012
The Ukrainian government reached an agreement with Russia’s VTB to refinance only half of its USD 2.0 bln loan that matures today, the Finance Ministry disclosed on its website yesterday. As part of the deal, VTB will buy two-year government bonds worth USD 1.0 bln and carrying a rate of 7.95%, while the other USD 1.0 bln will be repaid today. While not yet officially confirmed, media reported VTB was the key buyer of local USD-denominated t-bills worth USD 535 mln placed by Finance Ministry last week (yields ranged 9.30-9.45% for one-to-three year notes). That likely brought the full amount repackaged to about USD 1.5 bln, or in line with previous announcements/rumors.
Vitaliy Vavryshchuk: The need to repay the USD 0.5 bln portion in debt is still negative as the government is unlikely to raise new money on external debt markets any time soon. The news on the VTB loan, coupled with yesterday’s news that Gazprombank’s USD 2.0 bln loan to Naftogaz (NAFTO) has not yet been signed, implies BoP pressure might increase in 3Q12, adding more nervousness to the local FX market.
