National bank greenlights refinancing loans for six banks

The National Bank of Ukraine (NBU) throughout August 2020 provided UAH 905.3 million worth of refinancing loans at 6% maturing in over 30 days.

That's according to the report the NBU press service published on its website.

Who got refinancing

The NBU has disbursed refinancing as follows:

Tascombank received UAH 400 million, ING Bank Ukraine received UAH 200 million, Bank Avangard received UAH 140 million, Bank Sich received UAH 110 million, CIB received UAH 37 million, and Misto Bank received UAH 18.3 million.

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The next refinancing auction for loans maturing in 5 years will be held on August 14.

What is refinancing

Refinancing is the replacement of an existing debt obligation with another debt obligation under different terms. The terms and conditions of refinancing may vary widely, based on several economic factors, including borrower's creditworthiness.

If the replacement of debt occurs under financial distress, refinancing might be referred to as debt restructuring.

Background

• On July 27, 2020, the NBU approved refinancing for four banks.
• On July 3, the central bank held a tender for bank refinancing, having provided two financial institutions loans worth UAH 1.4 billion at 6%, maturing in 90 days.
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• On June 19, the NBU held a tender where it granted five banks refinancing loans worth UAH 637.5 million at 6%, maturing in 90 days.
• For a period from April 30 to September 25, 2020, a schedule was issued for NBU tenders to maintain banks' liquidity for up to 90 days. Tenders are held each Friday, and on long-term refinancing from 1 to 5 years – once a month, on a second Friday.