The Ukrainian government approved on October 24 a resolution to allow the nation's gas monopoly Naftogaz to issue international bonds for up to $1bn with a maturity of up to five years.

On October 22, the company's CEO Andriy Kobolev said that Naftogaz is going to start a road show for its $500mn-$1bn Eurobonds very soon.

The same day, news agencies reported that Ukraine has mandated BNP Paribas, Citi, Goldman Sachs International and JP Morgan as joint lead managers and joint bookrunners to arrange a series of fixed-income investor meetings in London and in the US in preparation of an offer of 10-year Eurobonds that will start on October 23.

A US dollar-denominated Reg S/144A senior unsecured benchmark 10-year offering will follow subject to market conditions the government said. In addition, the issuer may consider introducing a 'long' five-year tranche as part of the offering.

The move immediately followed an agreement between Kyiv and its main donor, the International Monetary Fund (IMF) over a new 14-month stand-by programme of $3.9bn. The programme will replace the arrangement under the Extended Fund Facility (EFF) agreed March 2015. Ukraine has received $8.4bn from the IMF so far under the multinational lender's EFF.

The rapidity of the announcement of a new Eurobond offer following the IMF deal has triggered worries that the Ukrainian government is preparing to cancel Kyiv's decision to increase gas tariffs for the population by 23.5% from November 1, which is necessary for the new $3.9bn support programme.

The IMF deal still needs to be approved by the board of directors before any new money is released. The IMF board decision will be contingent on the government following through with a promise to increase domestic gas tariffs by 23.5% in November and the passage of the 2019 budget law with a deficit of 2.3%, which has two more readings by the parliament before it becomes law.