Ukraine plans USD 1 bln Eurobond placement by May

Ukrainian authorities plan to issue USD 1 bln in Eurobonds under U.S. government guarantees in April or May, the Finance Ministry website reported on March 23. The securities’ risk will be rated equal to the sovereign risk of the guarantor, Finance Minister Natalie Jaresko said. “Investors will take into account the fact that the bonds are secured by the U.S. government,” she said. U.S. state guarantees for the Eurobond placement are only one of the instruments of financial support currently being provided for Ukraine from other countries and IFIs, the ministry website stated. In particular, the  financial support consists of USD 17.5 bln from the IMF and USD 7.2 bln from other donors, the website said.

Alexander Paraschiy: The opportunity to place USD 1 bln is an option that the IMF agreement opened for Ukraine. Though the government already received USD 5 bln from the IMF in March, extra funds are badly needed to defend the national currency. Besides an additional USD 5 bln from the Fund this year, Ukraine might receive USD 2 bln in Eurobonds under U.S. guarantees, USD 1.8 bln from IFIs, USD 1.8 bln from the European Union and USD 0.7 bln from other sources. For sure, all the funds are conditional on progress in reforms. If successful, the arrival of this funding will ensure the country’s solvency in 2015 and will the prevent further hryvnia volatility.