UNIAN
The successful placement of five-year eurobonds worth $1 billion issued under U.S. government guarantees announced by the Ukrainian Finance Ministry on May 27, is expected to reduce the cost of servicing the country’s public debt, according to the statement published on the ministry's Web site.
"The bonds, alongside the recent EU macro financial assistance, are intended to replace existing debt with more serviceable and less expensive international obligations," the statement reads.
The Ministry of Finance said the successful placement of the bonds, Ukreximbank debt restructuring, and the anticipated sovereign debt restructuring are expected to result in a reduction of the country’s debt burden, potentially creating conditions for the resumption of economic growth in Ukraine.
"As with previous U.S. loan guarantees, the terms of the current Loan Guarantee Agreement will enhance Ukraine's intention to meet the conditions of the IMF program and carry out other steps necessary to strengthen the rule of law, the social security system, as well as to further promote important structural reforms and the resumption of economic growth in Ukraine," the ministry’s statement reads.
As noted by Ministry of Finance, the nominal value of each bond is $200,000, with an interest rate of 1.847% per annum. Payment of interest will be carried out twice a year on May 29 and November 29 respectively. The bonds mature on May 29, 2020.
As UNIAN reported earlier, on May 26, the Cabinet of Ministers issued a decree to make an issue of 5-year Eurobonds worth a total of $1 billion guaranteed by the U.S. government. Yesterday Ukraine began placing bonds at a rate of 1.847% with a premium of 32 basis points against similar U.S. government bonds.