Page 55 - UKRRptMay21

8.5.1 Fixed income - bond news
Ukrzaliznytsia plans to issue a Eurobond this year, to partially cover for a disastrous 2020. Largely due to the coronavirus, a $110mn profit in 2019 turned into a $430mn loss in 2020, according to the State Railroad’s recently released Annual Report. Revenues from freight transportation were down 10% y/y to $220mn in 2020. Passenger revenues dropped 58% y/y to $148mn.
Ukraine’s largest pipe and railway wheel producer Interpipe intends to issue $300mn of new 5-year notes according to an April 26 report by Bloomberg. The new senior unsecured guaranteed notes will not be callable for two years, according to Bloomberg, which said investor calls were to commence on April 26. Standard & Poor’s rating agency assigned its B issue rating to the proposed notes on April 26 and said that Interpipe will use about half of the proceeds to make a one-off dividend payments. The other half will be used to strengthen Interpipe’s liquidity and finance upcoming investments, according to S&P. Interpipe’s EBITDA will amount to $170-210mn in 2021, S&P forecasts.
The Finance Ministry raised the equivalent of $370mn at its last weekly auction of April, the Ministry reported on its Facebook page. Yields in hryvnia reflect the Central Bank’s increase in the nation’s prime rate 10 days earlier to 7.5%. The yields were: 6-month – 9%; 1-year – 11.2%; 1.5 year – 11.3%; 2-year – 11.96%; 3-year – 12.28%. In the foreign currency placements, the Ministry sold $21mn worth of 1-year dollar bonds at 3.7% and €42mn worth of 1-year euro bonds at 2.5%.
Two Citibank strategists recommend investors buy Ukraine’s GDP warrants, saying they could rise from 105.5c today, to 125c. In a note to investors Luis Costa and Dumitru Vicol wrote: “Mounting fiscal pressures to finance the planned 5.5%/GDP deficit for 2021 are likely to push the government to deliver the promised institutional reforms.”
55 UKRAINE Country Report May 2021 www.intellinews.com