Discussions heighten regarding new VAT-bond issuances

Discussions heighten regarding new VAT-bond issuances



28 липня 2015 года
ICU

The head of the State Fiscal Service of Ukraine announced that steps are being taken to improve the VAT reimbursement process, particularly in regard to utilizing financial instruments for debt repayments. The division intends to submit proposals to increase the reimbursement ceiling to UAH70.0bn from the current UAH58.0bn while any new VAT-bond issues will require IMF approval.

Investment implications: While issuing VAT-bonds is not a new idea, the IMF has routinely disapproved of this option for the Ukrainian government. As the current EFF program lacks clear guidelines for specific issues or local market debt restructuring, issuing new VAT-bonds has not happened. Because of this, the government most likely should attempt to fulfill VAT reimbursements without issuing new bonds, especially since UAH12.0bn is an insignificant volume for the current treasury account. That being understood, as the MoF issues so few new market traded bonds, VAT bonds could attract significant market demand if investors like the yields.

Источник: ICU

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