Ukraine Places USD 500 mln Eurobond Issue

TheUkrainian government (S: BB-; M: B1; F: BB-) has completed the placement of a USD 500 mln Eurobond issue with a five year maturity. The bonds have a yield of 6.385%. Citigroup, Credit Suisse, Deutsche Bank and UBS managed the issue. Oleksandr Klymchuk: These Eurobonds have Ukraine’s lowest ever coupon for a USD-denominated issue and the tightest-ever spread over treasuries at 130 bps. However, the terms of the issue could have been much better if the placement had been completed two weeks ago when sovereign spreads were at a historic low (EMBI+ Ukraine: 91 bps) and the yield of five-year treasury notes was 10 bps lower. Though the volume could have reached USD 1 bln, we agree with the Ministry of Economy that this placement will be sufficient to cover the budget deficit without another issue this year.