Ukraine to issue government bonds to refinance USD 1bn loan from Russian VTB.

By bne IntelliNews May 24, 2012
Ukraine intends to issue domestic government loan bonds (OVDPs) worth USD 1bn for refinancing a loan from VTB Bank (Russia), EconMin Petro Poroshenko has announced. He noted that the bonds will be issued for two years at an interest rate significantly below the current market quotations. Thus, according to Poroshenko, the risks involving the foreign-exchange reserves of Ukraine have been eliminated. Poroshenko refused to disclose the other refinancing terms. In June 2010, the FinMin has raised USD 2bn credit from the Russian VTB bank (later the right to claim was transferred to IC VTB Capital) at 6.7% per annum. Under the contract, the loan was issued for a period up to December that year, with the possibility of three-time extension for six months. The ministry of finance has already exercised the right to roll over the loan three times.

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