Ukraine raises USD 1.25 bln from 8Y Eurobond placement

Ukraine’s Finance Ministry priced its USD 1.25 bln 8-year
international bond on April 26, it reported the same day. The issue has been
priced at 6.875% yield. “With this deal we cover part of our external borrowing
needs of the current year, the biggest share of which we expect to be obtained
from concessional sources,” MinFin commented.

Alexander Paraschiy: The new
issue has been priced with a spread of about 4bps to the existing Ukraine
sovereign curve, which looks like a success. Recall, Ukraine’s state budget for
2021 foresees about USD 7.2 bln of external borrowing, the majority of which is
still expected to be covered by loans from the IMF, World Bank and the EU.
However, such concessional financing is unlikely to exceed USD 2.2 – 2.5 bln,
as it is too naïve to expect Ukraine would be able to get more than one IMF
tranche this year. Therefore, MinFin’s reliance on such financing looks too
optimistic, and most likely it will have to continue issuing market bonds this
year.