Ukraine to back Naftogaz' restructured debt with state guarantee

Ukraine’s Cabinet of Ministers authorized the Finance Ministry to extend a state guarantee to the new Eurobonds that Naftogaz of Ukraine is attempting to restructure, the Finance Ministry said yesterday, according to various local news agencies. The guarantee will be granted as soon as agreement is reached with investors regarding the terms of the restructuring. Naftogaz said last week it is conducting negotiations with bilateral creditors to restructure its USD 1.6 bln in debt, including its USD 500 mln Eurobonds due on September 30. Andriy Gerus: The extension of a state guarantee will help Naftogaz to restructure its Eurobonds, but the coupon rate and other terms are not yet agreed upon. Naftogaz wants 9.5% and 5 years, while investors want 10-11% and 3-4 years. We think the final conditions will be somewhere in the middle.