Ukraine plans to raise USD 0.6 bln from WB-guaranteed loans in February

Ukraine’s Finance Ministry is planning to attract UAH
17.6 bln (over USD 600 mln) from international borrowing in February that will
be secured by a guarantee of the World Bank, the ministry reported on Feb. 1.
Initially, the ministry planned to raise funds in January. But instead, it
reported that it replaced it with USD 587 mln and EUR 33 mln from the placement
of local Eurobonds in January. Of the raised amount, the biggest portion was drawn
from bonds maturing on Feb. 21 (USD 287 mln in par value).

Recall, the World Bank provided a USD 750 mln loan guarantee
to Ukraine on Dec. 18. Ukraine’s MinFin used half of the guarantee to attract EUR 349 mln
in loans in late December.

Alexander Paraschiy: The loan
under the World Bank guarantee will be very helpful to the government, which
faces large foreign currency repayments in the coming months. In February,
Ukraine will have to repay a total of USD 420 mln to the IMF and USD 745 mln to
the holders of local Eurobonds. Only a portion of these bonds can be refinanced
domestically as one of MinFin’s biggest domestic lenders, Oschadbank (OSCHAD),
is scheduled to pay USD 477 mln on its international Eurobonds already in
March.

In any case, domestic borrowings will remain an
important source of the government’s hard currency financing throughout the
first quarter of 2019, as MinFin has scheduled to place local Eurobonds at each
of its weekly bond auctions in 1Q19.