14:44 31.03.2021

New U.S. administration examining ways to expand support for Ukraine, but practice of state guarantees suspended now – U.S. Embassy counselor

3 min read
New U.S. administration examining ways to expand support for Ukraine, but practice of state guarantees suspended now – U.S. Embassy counselor

As a result of post-Maidan reforms, in recent years Ukraine also has been able to effectively access world capital markets to meet its borrowing needs, and a successful program of reforms will only improve Ukraine's market standing and lower borrowing costs, Economic Counselor of the U.S. Embassy Megan Bouldin has said.

"The new administration is examining many ways it can expand support for Ukraine, but the United States has not provided this type of guarantee for several years," she said in an interview with Interfax-Ukraine.

Bouldin noted that Ukraine continues to have access to significant volumes of low-cost financing through its deals with the IMF, the World Bank and the EU.

"To access this financing, Ukraine will need to continue with the types of reforms we have been discussing in relation to anti-corruption institutions, the judiciary, the energy sector, land reform, the budget and the central bank," she stressed.

Finance Minister Serhiy Marchenko said on March 30 that the beginning of the work of the new White House administration makes it possible to raise the issue of the U.S. allocation in 2021 of new guarantees for Ukraine's Eurobonds in the amount of $1 billion, which will allow refinancing a similar issue of 2016 Eurobonds.

"(...) We got the opportunity to raise this issue again in terms of negotiations with our international partners. And as soon as we have any result, we will inform you separately," the minister said at a press conference in Kyiv on Tuesday.

As reported, Ukraine on September 23 placed five-year $1 billion eurobonds under United States guarantees at the yield rate of 1.471%. The organizers of the placement are: Citi, JP Morgan and Morgan Stanley.

Before that, Ukraine and the United States in June of the same year had signed an agreement to provide the country with a third tranche of credit guarantees for $1 billion. The funds were to be used for social support of the most vulnerable segments of the population.

The first U.S. secured $1 billion eurobonds were issued in 2014. The yield was 28 basic points more than U.S. bonds due April 30, 2019 – 1.844% per annum. JP Morgan and Morgan Stanley organized the deal.

A year later, in May 2015, Ukraine again placed five-year Eurobonds for $1 billion under U.S. guarantees with a yield that exceeded similar U.S. government bonds by 32 basis points. The deal was organized by Citi, JP Morgan and Morgan Stanley.

According to the agency, during the Donald Trump administration, attempts to obtain the allocation of such guarantees to refinance the first two issues ended in vain. They were repaid on time and in full.

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