Kyiv to raise USD 438 mln in debt to redeem Eurobond

The Kyiv (CITKIE) City Council amended the municipal budget yesterday and approved of raising UAH 3.5 bln (USD 438 mln) in three-year debt domestically to redeem USD 250 mln in Eurobonds maturing in November and cover the budget gap. The interest rate is capped at 15.25%.

Vitaliy Vavryshchuk: Given the high targeted debt volume and below market cap on the rate, we expect Kyiv officials will attract money in a non-market deal with commercial banks. The most likely scenario foresees commercial banks disbursing money for Kyiv, with funding coming via refinancing loans from the NBU. We are confident the central government will support the timely redemption of Kyiv’s Eurobonds. The news came in fully expected and should have negligible impact on the Eurobond price.