Ukraine finance minister expects USD 1.0 bln placement by October

Ukrainian Finance Minister Oleksandr Danyliuk said on July 27 he anticipates that a USD 1.0 bln Eurobond placement under U.S. guarantees will be arranged by October. “U.S. government guarantees were signed for USD 1.0 bln, which will enable placing our bonds at relatively low rates,” he told a Ukrainian television network. “These are record low rates, which is very important for Ukraine at this stage.” Ukraine will receive the funds two weeks after the IMF executive board meeting, he said. 

Alexander Paraschiy: Danyliuk’s statement confirms our view that the debt placement under U.S. guarantees cannot happen without the IMF’s blessing for its next Ukraine loan tranche. Recall, the Ukrainian government signed an agreement for USD 1 bln in loan guarantees with the U.S. on June 3.

The IMF board will resume its meetings not earlier than August 25, we estimate. Based on what Danyliuk said, he expects the board will consider Ukraine no later than mid-September. The key question that remains is what exactly is causing the IMF board’s delay in considering the next tranche for Ukraine, which had been earlier expected in July. Neither the IMF nor the Ukrainian government has explained this delay, which only adds uncertainty to this question.