Page 51 - UKRRptAug19

result. At the same time Ukraine only drew down about half of the $17.5bn allotted to it under the EFF. The hope is that under Zelenskiy the government will be more responsible and responsive to the IMF’s demands and the budget will receive all the money promised to it as part of an extended EFF.
Ukrzaliznytsia tried to float a Eurobond last year shortly after a sovereign issue, but w ithdraw the offer due to the poor reception it received from investors. This time round things have gone a lot more smoothly. The bond was initially offered with a guidance on the yield of between 8.5% and 8.625%, according to Bloomberg sources, but finally priced at 25bp below the end of the indicative range.
Ukrzaliznytsia will use the funds to refinance a $150mn September amortization payment on its 9.875% earlier dollar bond, which is in technical default. The rest of the money could be spent on the company’s UAH1 trillion ($36bn) modernisation programme .
The success of the Ukrzaliznytsia bond may open the door for other corporate issuers to come to market, say analysts. Ukraine’s state-owned oil and gas company Naftogaz is also poised to sell euro bonds and will start a road show this month.
51 UKRAINE Country Report August 2019 www.intellinews.com