IMF approves USD 15 bln restructuring of Ukraine’s 2018 debt

The Ukrainian government will seek to gain as much as USD 15.3 bln from “debt operations,” or restructuring of existing state and state-guaranteed debt, in 2015-2018, according to an IMF staff report made public on March 12. On top of that, the IMF sees Ukraine receiving USD 24.7 bln from Western governments and IFIs in the same period, including USD 17.5 bln from the IMF itself. The IMF plans to provide USD 10.0 bln to Ukraine in 2015 and USD 2.5 bln in each of the years 2016-2018. Other donors are expected to provide USD 6.3 bln in 2015 and USD 1.0 bln in the next year.



The proposed schedule of financing via “debt operations” is USD 5.2 bln in 2015, USD 3.4 bln in 2016, USD 4.4 bln in 2017 and USD 2.3 bln in 2018. The specific terms of the “debt operations” have yet to be announced and approved by debt holders. The specific terms of the “debt operations” have yet to be announced and agreed with debt holders, and we expect this process may start today as Ukraine’s Finance Minister Natalie Jaresko will hold a conference call for investors at 4 p.m. Kyiv time.



As a result of donor financing and “debt operations”, Ukraine is expected to receive a total of USD 21.4 bln in 2015, half of which will go to strengthen gross international reserves.



Alexander Paraschiy: At this stage, it’s clear that Ukraine will try to seek to extend the maturity of all its sovereign and guaranteed Eurobonds due in 2015-2018, including the USD 3.0 bln Eurobond issued to the Russian State Welfare Fund and USD 0.5 bln in state guaranteed debt of Naftogaz to Gazprombank. All that debt totals USD 12.0 bln, we estimate, so the core question is what else will be included in the total restructuring offer of USD 15.3 bln. Our guess is some quasi-sovereign debt could also be here, including Eurobonds totaling USD 0.6 bln issued by the city of Kyiv (CITKIE), USD 1.5 bln issued by Ukreximbank (EXIMUK) and USD 1.2 bln issued by Oschadbank (OSCHAD).



The success of the “debt operation” task does not look critical for the sustainability of Ukraine’s economy and public finances if other donors provide their assistance as scheduled. However, a successful debt restructuring might add stability to the Ukrainian currency as it will allow the central bank to increase its international reserves to three months of imports by the end of the year.

Источник: Конкорд Капитал