Ukraine provides state guarantees for several Naftogaz loans
11 October 2013
Ukraine’s parliament approved on October 10 changes to the state budget allowing the government to issue guarantees for restructuring of several Naftogaz of Ukraine (NAFTO) banking loans that are due in 2013. Naftogaz was unable to repay the loan to Russian Gazprombank (due on June 26, 2013, outstanding amount of USD 1.79 bln, according to Forbes.ua), according to supplementary documents for the budget law amendment.
Gazprombank reportedly agreed to restructure this loan (for five years, according to the Ekonomichna Pravda news site) in case it will have a state guarantee embedded. In addition, Naftogaz is not going to repay three tranches to state Oschadbank (OSCHAD) at a total amount of UAH 4.8 bln due this year and is going to issue local state-guaranteed bonds to restructure this debt.
Alexander Paraschiy: The news is broadly neutral for Naftogaz and its key lenders, Ukraine’s state banks. Interestingly, neither document mentions a USD 400 mln Naftogaz debt to VTB Capital (due today, October 11, 2013, according to Naftogaz’s annual report). That suggests VTB Capital has not agreed to restructure this debt – most likely, Naftogaz will have to repay it. As we wrote before, repayment of this loan would create additional pressure on Ukraine’s foreign currency reserves this month, on top of the pressure that will be secured by the planned repayment of about USD 650 mln to the IMF on October 30.
