Page 43 - UKRRptAug20

6.1.2 ​Budget dynamics - specific issues...
6.1.3​ Budget dynamics - funding
Of the $2.4bn Covid-19 Anti-Crisis Fund, 54%, or $1.3 bn has been allocated for road construction and maintenance,​ Prime Minister Shmyhal writes on Facebook. After a Cabinet of Ministers meeting yesterday, Infrastructure Minister Vladyslav Krikliy said: “This is an additional 1,459 km of public roads this year.”
The Ukrainian government placed at par $2bn in Eurobonds maturing in March 2033 at a 7.253% yield to maturity​ (YTM, priced on July 23) with the settlement expected on July 30, according to an announcement on MinFin’s website. The government will use the total of $846mn to buy back notes maturing in September 2021 (the principal of $435mn at 104.5% of par) and 2022 (the principal of $371mn at 105.5%), according to MinFin’s announcement at a stock exchange website. The settlement is expected on July 28. The tendered bonds traded at 103.3% and 105.1% of par on July 21, the day before the tender offer announcement, according to Bloomberg. Currently, there are $1.409bn of 2021 notes and $1.384bn of 2022 notes outstanding. The yield for the new notes Ukraine has placed – and the premiums for the outstanding notes it offered to buy – is comparable to those at its first, subsequently cancelled attempt at this liability management exercise in late June - early July. The premium at, which the government plans to buy back the 2021 notes, 1.2pp, is higher than the 0.9pp it offered on June 30, while the premium for the 2022 notes, 0.4pp, is lower than 0.6pp previously, based on our calculations. The YTM of the newly placed bonds is 0.05pp lower than the 7.3% that Ukraine obtained at the previous pricing in early July, while the yield spread with Ukraine’s existing September 2032 Eurobond amounted
43​ UKRAINE Country Report​ August 2020 ​ ​www.intellinews.com