Ukraine government pays first coupon on restructured Eurobonds
3 March 2016
Ukraine’s Finance Ministry made a coupon payment of USD 487.7 mln for all its newly issued Eurobonds, Interfax-Ukraine reported on Mar. 2, referring to anonymous sources in the ministry. Recall, Ukraine issued nine new Eurobonds totaling USD 11.95 bln in November 2015 as a part of a restructuring of USD 14.94 bln of old bonds maturing between 2015 and 2023. The new issues of Eurobonds have the same coupon dates (Mar. 1 and Sept. 1) and are maturing at one-year intervals between September 2019 and September 2027.
In December, Ukraine additionally issued USD 351 mln in new Eurobonds maturing in 2019 and 2020 as a part of restructuring Kyiv city Eurobonds. This year, Ukraine issued a nadditional USD 315.3 mln in 2019 Eurobonds as a part of a restructuring of state-guaranteed debt owed to Sberbank of Russia and Citibank. Since the first coupon period, the additionally issued bonds will have the same profile as the bonds issued in November. The total amount of new Eurobonds issued is USD 12.62 bln, we estimate.
Alexander Paraschiy: The two semi-annual coupons under sovereign Eurobonds are the biggest external payments of the Ukrainian government this year. The recent payment should decrease Ukraine’s gross international reserves to below USD 12.5 bln (about three months of future imports) by the end of March, from USD 13.3 bln at the year’s start.
Ukraine was earlier expecting to receive four tranches from the IMF for about USD 5.8 bln and other loans from Western governments for USD 3-4 bln in 2016, which would have boosted Ukraine’s international reserves up to USD 20 bln by end-2016. Thus far, there is no information that the Ukrainian government has signed a new memorandum that would enable it to receive the next USD 1.7 bln IMF tranche, so it already does not look likely that Ukraine receive four tranches this year. The next IMF tranche (and other loans) is very unlikely to be disbursed until a new parliamentary coalition emerge in Ukraine, we beleive.
