Ukraine to try to more actively place long-term amortized bonds
Ukraine will try to issue bonds with longer term and amortization payment schedule if it is possible to cut the refinancing risk, according to the medium term strategy for the state debt management for 2019-2022 passed by the Cabinet of Ministers on June 5.
"Following a successful state debt management operation in September 2017, the possibility of carrying out other similar operations is considered under the condition of a favorable situation," the Finance Ministry said, providing another way to smooth out the public debt repayment schedule in the strategy.
The ministry recalled that the amendments made to the Budget Code in 2017 allow for public operations on redemption and on the exchange of all or part of bonds.
According to the document, in 2019-2022, Ukraine will face peak payments on state debt: in 2019 – UAH 483.4 billion ($17.6 billion), in 2020 – UAH 491.5 billion ($17.4 billion), in 2021 – UAH 482.9 billion ($16.4 billion) and in 2022 – UAH 481 billion ($16 billion).
According to estimates, state debt payments in 2019 are estimated at 12% of GDP and 52.7% of state budget revenues, in 2020, respectively, 10.8% of GDP and 47.9% of revenues, in 2021, 9.5% of GDP and 44.1% of revenues and in 2022 – 8.6% of GDP and 40.2% of budget revenues.
"The peaks of refinancing will be smoothed by attracting new debt with a longer maturity, which will limit the repayment in the specified years by carrying out active operations on managing the public debt," the document says.
"The peaks of refinancing will be smoothed by attracting new debt with a longer maturity, which will limit repayment in the specified year through active operations on public debt management," the ministry said in the strategy.