Total coupon payments amounted to USD 505.4 mln. The ministry itself provided no press release on that. The restructuring's bonds of USD 12.96 bln outstanding mature each year between Sept. 1, 2019 and Sept. 1, 2027 and have a coupon rate of 7.75%.
Alexander Paraschiy: There is no surprise in Ukraine’s smooth servicing of its debt. The September coupon will be the key driver of Ukraine’s widening current account deficit for the second half of 2017. Among other large debt repayments (which won’t affect the current account deficit, but will reduce Ukraine’s gross reserves) are about USD 600 mln in local Eurobond repayments and about USD 650 mln in repayments to the IMF, all scheduled for November-December 2017.
We still expect Ukraine will be able to get about USD 1 bln loan from the IMF and raise USD 0.5 bln from placement of international Eurobond this year, which will result in USD 18.5 bln in end-2017 gross international reserves (or about 3.7 months of imports).
Ukraine’s Finance Ministry has hired BNP Paribas, Goldman Sachs and JP Morgan to arrange an international Eurobond placement. No official comments have been made by state officials so far. Ukrainian officials already expressed their intention earlier this year to raise USD 0.5-1.0 bln by year’s end from such a placement. The last time Ukraine tapped the international fixed income market was in mid-2013, before the outbreak of war.
Alexander Paraschiy: Our understating is that Ukraine’s new Eurobond placement is possible only after the approval of the next IMF loan tranche. The preparation for placement suggests MinFin sees the fifth IMF tranche under the EFF program is realistic and will arrive as early as October. We believe it's likely that some state banks (Ukreximbank and Oschadbank) will follow MinFin by also trying to issue new Eurobonds to partially refinance the older issues, which bear excessively high interest rates.
