A $725 million private placement

UKRAINE - In Brief 26 Aug 2018 by Dmytro Boyarchuk
On August 24, in the midst of National Independence Day celebrations, Ukraine raised $725 million at the international market through private placement. I have a mixed impression from this issue. The funds have been attracted only for six months. And the yield was reported 9% which is quite expensive even under delayed IMF program. What might have triggered this placement just two weeks before arrival of the IMF mission to Kyiv? It’s very likely that authorities decided to generate one more positive message for Ukrainians for Independence Day. We had a spectacular military parade: I’ve never seen such a variety of new military equipment in my life. Very likely Ukrainian leadership needed some good economic news on the top of demonstration of military might. I do not see any other urgent needs to make expensive placement before the deal with the IMF is closed. No huge payments over the upcoming months. Gross international reserves are still high ($17.75 billion by the end of July). Chances for new deal with the Fund look good after the IMF announced its mission arrival to Kyiv. In the mid of September (the IMF mission will be visiting Kyiv on September 6-19) we will have more info about the purpose of this placement.

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