No refinancing of debt repayments

No refinancing of debt repayments



27 квітня 2015 года
ICU

The MoF has sold only a small portion of military bonds but made significant debt repayments since mid-March. UAH28.72bn in principal and interest repayments, including this week's repayments, was scheduled in April, included US$0.34bn in domestic FX-denominated bond redemptions. These repayments were all fulfilled with no new borrowings, except for funds from the debut tranche from the IMF. The debut tranche of the new EFF program from the IMF and significantly increased the NBU's key interest rate, putting the IMF into a difficult situation. Obligated to repay debt, including large repayments in FX (about US$1.5bn during March and April) without FX proceeds, the MoF is unable to attract new domestic financing as lack of domestic QE support caused the cost of new borrowings to rise significantly.

Investment implications: The MoF must tap the newly received EFF funds to fulfil FX debt repayments, while it utilizes budget revenues to repay local currency repayments. At the beginning of the month, the MoF had 26.67bn in its treasury accounts, the highest level since the end of 2005. During April, the MoF is expected to repay UAH16.58bn in local currency using budget revenues. Current money market and domestic bond market interest rates are unattractive to the MoF, and the IMF terms have banned the further use of domestic QE. Because of this, we foresee no new domestic borrowings through the end of the month and during May, while the MoF is able to issue US-backed bonds very soon (see our Daily from last Friday).

Источник: ICU

Другие обзоры облигаций от ICU


Компании

все компании