|The Ministry of Finance of Ukraine to issue US guaranteed bonds worth $1 billion USD|
|28.05.2015 | 10:44 |||printer friendly|
NOT FOR DISTRIBUTION IN OR INTO THE UNITED STATES OR IN OR INTO ANY JURISDICTION IN OR INTO WHICH SUCH DISTRIBUTION MAY NOT BE PERMITTED
The Ministry of Finance of Ukraine to issue US guaranteed bonds worth $1 billion USD
On May 26, the Ministry of Finance of Ukraine, authorized the issuance of bonds worth $1 billion USD on the international markets, following the recent signing of the Loan Guarantee Agreement between the governments of Ukraine and the United States. The Agreement provides that the Ukrainian bonds will be fully guaranteed by the United States – as a result, the bonds will be priced by participants on the international debt markets on the basis of United States Government rates.
This is the second Loan Guarantee Agreement signed between the two countries since the Revolution of Dignity, reflecting the continued support and trust shown by the United States for Ukraine’s efforts towards macroeconomic stabilization and growth. This Agreement, being part of a broad international package of bilateral and multilateral economic support for Ukraine including the IMF four year program (IMF-Extended Fund Facility), solidifies support for the Ukrainian Government’s economic reform policies.
The issuance of the bonds comes in the wake of a series of recent positive developments reflecting the growing international support and acknowledgment of Ukraine’s efforts to return to economic growth in 2016. The bonds, alongside the recent EU macro financial assistance, are intended to replace existing debt with more serviceable and less expensive international obligations. If successful, this bond issue, theUkreximbank debt operation, and the contemplated sovereign debt operation, are expected to result in a reduction of Ukraine’s debt burden potentially creating the conditions for a return to economic growth.
In line with the previous U.S. loan guarantees, the conditions of this most recent Loan Guarantee Agreement reinforce adherence to the IMF program as well as other steps that are needed to strengthen rule of law and governance, strengthen the social safety net, advance other critical structural reforms and return Ukraine to economic growth.
The face value of each bond is $200,000, with a coupon of 1.847% per year. Payment on the coupons will occur twice a year (29 May and 29 November), and the maturity date is 29 May 2020