22 December 2011
Ukraine’s gross external debt remained virtually unchanged (-0.2% qoq) in 3Q11, but grew by 10% yoy, the National Bank of Ukraine reported this week. Stock at end-9M11 stood at USD 123 bln or 77% of 2011E GDP. Public sector debt declined by 2% q-o-q to USD 34.3 bln, while banking sector obligations dropped by 6% qoq to USD 25.9 bln. At the same time, the corporate sector attracted net USD 1.8 bln over the period, bringing total debt to USD 56.1 bln. End-9M11 external debt repayments due within the next 12 months amounted to USD 52.6 bln or 32.9% of GDP and are 66% covered by reserves (vs. 71% as of end-2Q11). Svetlana Rekrut: In 3Q11, the gross external debt rollover rate shrank from 140% in 2Q11 to 124%, with the banking sector the most active in repaying obligations (rollover rate of 84%). The corporate non-financial sector still managed to increase debt despite tense market conditions, which reflects intensive related-party lending. Given external capital markets are likely to remain challenging in 1H12, we see external debt rollover the main challenge for the public and private sector in 2012. We expect gross external debt to continue declining in 1H12, but growing again in 2H12 to reach USD 127 bln by end-2012 or 70% of 2012E GDP.
Gross external debt by sector, 9M11
GED Chg,qoq ST debt Chg,qoq Rollover rate 3Q11
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Public 34.3 -2% 6.5 5% 175%
Banks 25.9 -6% 12.1 -5% 84%
Other corporate 56.1 3% 32.3 1% 130%
Inter-company lending 6.8 5% 1.8 -5% 182%
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Total debt 123.1 0% 52.6 -0% 124%
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Note: GED = Gross External Debt. ST debt consists of obligations maturing within the next 12 months
Source: National Bank of Ukraine, Concorde Capital estimates