Ukrainian Railway prepares Eurobond issue, Fitch rates it at B-

Ukrainian Railway (RAILUA) is planning an issue of
three- or five- year Eurobonds and has scheduled an international roadshow for
June 26, Interfax-Ukraine reported on June 24, citing its sources. The same
day, Fitch Ratings confirmed Ukrainian Railway’s plans, awarding a B- expected
rating for the issue. The new bond is expected to be issued in late June or
early July, Fitch reported.

Alexander Paraschiy: Ukrainian Railway needs foreign currency funding to smoothly pay its
USD 150 mln amortization on its existing Eurobond in September, so the
company’s attempt to issue a new bond is not a surprise to us. If the deal happens, that will remove concerns about the company’s
foreign currency liquidity. Most likely, the new bond will be priced at 8%-9%
YTM, depending on its maturity. Another candidate to place an international
bond this year is Naftogaz, as we wrote before.