Ukraine repays its USD 1 bln Eurobond due June 4

Ukraine repays its USD 1 bln Eurobond due June 4



5 червня 2014 года
Конкорд Капитал

Ukraine’s Finance Ministry fully repaid its USD 1 bln Eurobond and paid the last coupon on June 3, according to an official release from the ministry. The bond, issued in June 2012, was due on June 4.



Alexander Paraschiy: While the June 2014 bond offered yields comparable to distressed bonds, there was a low risk that Ukraine would not repay it. Last month, the government received USD 4.2 bln from the IMF and buyers of U.S.-guaranteed notes, which was more than enough to cover this obligation, with no other big repayments due this month.



We believe the repayment of June’s Eurobond will positively affect the prices of the shorter corporate Eurobonds of Ukrainian issuers. The presence of this high-yield bond, which had made the sovereign curve deeply inverted, offered a good explanation for the high yields of the bonds of Naftogaz (NAFTO) and PUMB (PUMBUZ), which mature in 2014.



The government still has to repay totally USD 2.4 bln in ForEx debt till the year end, as well as help to repay the USD 1.6 bln Eurobond of state monopoly Naftogaz (NAFTO), which matures in end-September. The gas monopoly clearly lacks money to repay its Eurobond, and it can only count on state support.



Given that Naftogaz’s bond is guaranteed by the government, and the latter is not going to spoil its relations with potential international donors like the IMF, we see a high probability that Naftogaz’s debt will be repaid smoothly.

Источник: Конкорд Капитал

Аналитик: Александр Паращий
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