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44 I Eastern Europe bne December 2018
“The issues were oversubscribed with a total of $4.9bn of demand despite high political risk”
is enough to cover the government's exter- nal debt repayments until the end of Febru- ary. Furthermore, we believe the staff-level agreement with the IMF is sufficient for Ukraine to be authorized to receive the tranche of EUR0.5bn from the EU and $0.4bn under the World Bank guarantee, which will allow the government to repay FX debt at least until May 2019.
But the government needs to plan the next new Eurobonds issue no later than 1Q19, in order to repay $1bn of US- backed bonds in May and in September-
maturing in 2024, and $1.25bn at a 9.75% yield, maturing in 2028.
The issues were oversubscribed with
a total of $4.9bn of demand despite high political risk given next year's elections, lack of a finalized deal with the IMF, and the currently unfavorable situation for emerging markets. Under
such circumstances, we see the cost of new funding as close to fair. The most expensive issue during the last decade was in 2012, when five-year bonds were placed at 9.25% with a spread to the benchmark above 800bp.
External debt repayments are fully funded at least until May. The new Eurobond issue
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Warmer climate could add an extra month per year to Northern Sea Route navigation
bne IntelliNews
Global warming that has already produced consistently higher temperatures mean that navigation along the Russia's Northern Sea Route could be extended by one additional month each year, Tass said on November 12 citing Professor Oleg Anisimov of the State Hydrology Institute said on Friday.
"Currently, the Northern Sea Route’s exploitation term is about two months, and forecasts based on climate models say the term may be extended by another month in the mid- dle of the century, making it three months, which opens new economic opportunities," Anisimov argues, as cited by Tass.
The navigation would still require ice breakers, although the ice will be thinner, other researchers presenting along- side Anisimov said. The northern route is an alternative shipping route to sailing around the Horn of Africa and cuts weeks off the trip between Europe and Asia.
In 2017, the cargo flow via the Northern Sea Route amounted to 10.7mn tonnes, and its capacity is planned
to be expanded to 40mn tonnes by 2020 due to the projects that developed in the ports of Sabetta and Murmansk.
After sending the first container ship Venta Maersk loaded with 3,600 containers through the Northern Sea Route
in September, Maersk representatives told the Financial Times that "we do not see the Northern Sea Route as
a commercial alternative to our existing routes." The main problem of the Northern Sea Route, which
became possible due to thinning of ice, is that only narrow container ships with limited capacity accompanied by atomic icebreakers can pass, while the standard ships circulating between Asia and Europe fit about 20,000 containers. The route also does not pass many markets, allowing little uploading diversification, and is not available all year long.
Nevertheless, Kremlin is still betting on the development of the route as it is well suited for tanker transportation of oil and gas, with most of the total turnover so far account- ing for oil tankers and liquefied natural gas (LNG) ship- ments of Novatek Russian gas producer.
On November 12 in a separate report Reuters said that new ice-breaking tanker Georgiy Brusilov capable of navigating the Arctic on its own left South Korea's Daewoo Shipbuilding and is set to load its first LNG from Novatek's Yamal plant. This will make the seventh ARC7-class LNG carrier to join the Yamal fleet.
While the Arc7 carriers can serve the Northern Sea Route during the summer from northern Russia to Asia, during winter serve westward directions and either deliver to northwest Europe or transfer LNG for onward journeys
to Asia.
Recent reports suggested that Russian gas giant Gazprom could also try to benefit from developing Northern Sea Route infrastructure by building Russia's most northern railway to Sabetta port together with Russian Railways.