16:03 30.12.2013

Ukraine pays off $750-mln loan to Sberbank, VTB

Ukraine paid off a loan of $750 million issued by Russia's VTB Capital plc and Sberbank in September 2013 by the due date of December 27, the Ukrainian State Treasury said.

Initially the loan at 6.5% per annum was to mature on December 12, 2013, but the parties agreed to an extension of the loan maturity until December 27, 2013 at 9.5% interest.

Ukraine paid UAH7.27 billion or $0.91 billion at the National Bank's official rate on foreign debt in the week December 23-30 (UAH7.993/$1 on December 30).

The country borrowed UAH23.98 billion ($3 billion) from abroad. This amount in US dollars is equivalent to funding that Russian granted by way of purchasing Ukrainian Eurobonds with National Welfare Fund (NWF) money.

Between January and December 30, 2013, Ukraine repaid UAH79.8 billion in government debt, UAH37.97 billion of it foreign debt, just below a targeted UAH81.07 billion. Debt servicing came to UAH31.69 billion, of which UAH9.84 billion foreign debt, just below a planned UAH32.82 billion.

Ukraine borrowed UAH150.51 billion in order to carry out these payments and finance the budget. This included UAH47.96 billion or $6 billion from abroad. Ukraine initially planned to borrow UAH138.85 billion.

Government debt repayments grew 18.6% in 2013 compared with 2012, due mainly to an increase of 29.4% in foreign debt repayments. Debt servicing grew 31% (42%).

After Ukraine decided against signing an Association Agreement with the European Union, the Ukrainian and Russian presidents agreed on December 17 that Russia would use National Welfare Fund money before the end of 2013 to buy $3 billion in two-year Ukrainian bonds with a coupon rate of 5% pa, and provide Ukraine with $12 billion in 2014.

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