NBU, finance ministry handle re-profiling of UAH 219.6 bln in government bonds in central bank's portfolio
The National Bank of Ukraine (NBU) and the Ministry of Finance of Ukraine have completed a transaction with government debts (re-profiling) to exchange domestic government bonds owned by the National Bank of Ukraine for new ones, the NBU said on the website.
According to the report, the entire bond portfolio belonging to the NBU is estimated at UAH 360.6 billion, while bonds worth UAH 219.6 billion were subject to re-profiling.
Of the total portfolio, bonds worth about UAH 145.2 billion were converted into long-term hryvnia-denominated bonds with various periods of maturity, their yield is pegged to inflation. Other bonds worth about UAH 74.4 billion were swapped for long-term hryvnia-denominated bonds with various periods of maturity with fixed interest rates. The remaining bonds have a fixed yield.
"Repayment of the re-profiled bonds will take place equally - approximately UAH 12 billion will be spent every year until 2047. Such an approach to repayment of principal debt will allow to evenly distribute the burden on the state budget for 30 years," the NBU press service quoted Minister of Finance Oleksandr Danyliuk as saying.
The fact that there are two types of bonds - those with a fixed rate and a floating rate will ensure the diversification of interest rate risks. In case of lower market interest rates, the Ministry of Finance will pay less due to bonds with the floating rate, and in case of higher rates on the market, fixed-rate bonds will restrain the cost of borrowing.