REUTERS
These are five- and ten-year bonds.
Ukraine has placed two issues of eurobonds worth about US$2 billion in total.
These are five-year bonds worth US$750 million at 9% per annum and 10-year bonds worth US$1.250 billion at 9.75%, a source told UNIAN.
Investors' demand exceeded the offer by 2.5 times, amounting to about US$5 billion.
Senior Financial Analyst at ICU Taras Kotovych describes the latest placement as a success, taking into account the current conditions on international markets and investors' risks, namely geopolitical and economic instability in Ukraine and forthcoming presidential and parliamentary elections in the country.
"The yield of the five-year issue is not the highest in the last 15 years, although investors' premium for Ukrainian risks was set at 602 bps. For example, in 2012, when the most expensive issue of five-year eurobonds was handled, the premium for the risk was higher, i.e. 800 bps. And despite the fact that since then the yield on U.S. debts, used as reference for Ukraine, has grown, the yield of the current Ukrainian issue was 9%. And it was 9.25% in 2012," he said.
As for the 10-year issue, Kotovych noted that it looks more expensive compared with other Ukrainian loans. However, he said, previous bond placements were handled amid "more peaceful times, when the basis for determining the profitability and risks in the country were lower."
As UNIAN reported earlier, Ukraine's Finance Ministry on August 24 conducted a private placement of US$725 million in short-term government foreign loan bonds maturing in 2019. They were placed at 9.1% per annum. A year earlier, Ukraine in September 2017 successfully placed eurobonds worth US$3 billion at 7.375% per annum.