NBU allows Ukrainian banks to freely purchase their own Eurobonds

The National Bank of Ukraine (NBU) announced in an Aug.
9 press release it has made it easier for banks to purchase their own
international Eurobonds. It has also eased the purchase by banks of sovereign
Eurobonds of G7 countries with ratings of no less than AA-/Aa3 and maturity of
no longer than five years. While earlier a Ukrainian bank had to apply for an
individual license for such purchases, now it can do such transactions by using
its general license, the NBU commented. 

Currently, three Ukrainian banks have Eurobonds
outstanding, including Oschadbank (OSCHAD), Ukreximbank (EXIMUK) and PUMB
(PUMBUZ). There are also three Eurobond issues of Privtabank (PRBANK), which
were bailed-in in late 2016, based on Ukrainian legislation.

Alexander Paraschiy: As we
highlighted in our comments on the interim financial results of Oschadbank
and Ukreximbank,
their Eurobonds are currently the most expensive source of their funding.
Therefore, it would be wise for them to consider their partial purchase or
early redemption in order to reduce their average cost of funding and interest
expense. The approved regulation makes such operations easier for the banks.
This may also play to support the prices of these bonds. All this leads us to
maintain our bullish view on OSCHAD, EXIMUK and PUMBUZ notes.