Page 37 - UKRRptJan21
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           - public finance management;
- good governance and the rule of law:
- improving the business climate;
- sectoral reforms and state-owned enterprises.
Ukraine completes tap issue of 2033 bond at 6.2% yield. ​Ukraine’s finance ministry issued additional bonds due in March 2033 for $600mn, according to its December 11 report. The tap issue was priced at 108.914% of par, implying 6.20% YTM. The yield was the lowest in the history of Ukraine’s public $Eurobond offerings, Finance Minister Serhiy Marchenko stressed.
Settlement on the additional bond is expected on December 18. The proceeds will be used to finance general budget needs.
The 13-year Eurobond for $2bn was initially priced at 7.253% YTM on July 23. The spread of the initial placement to the US treasury curve was 662 bps, while it was 525 bps for the tap issue.
The successful completion of this long-awaited issue allows MinFin to significantly improve its liquidity and pay off most of its planned expenditures for December. Namely, this placement, as well as the recently provided €600mn loan from the EU, cover about 40% of MinFin’s $3bn financing needs for December, as earlier announced by PM Denys Shmyhal. The rest is likely to be filled with the placement of local government bonds.
The new bond's long tenure indicates MinFin is not sure whether the government will be able to secure IMF lending in the coming months. Otherwise, aiming at minimizing debt service costs, MinFin would have tried to issue a short-term loan on the market. Moreover, the success of such a placement, in and of itself, could be played to postpone the next IMF loan tranche as the government won’t feel an urgent need in such a deal.
 6.1.4​ Budget dynamics - privatization
       Ukraine netted $90mn in 419 privatization auctions in 2020, Economy
Minister Ihor Petrashko said on Channel 24 TV, reported the Ministry. By using a transparent internet-based auction system, the State Property Fund managed to push average sales prices up three times over asking prices. Next month, the Rada is to vote on a government bill to sell large state companies. This process could net around $500mn this year, the government estimates.
Privatization should bring in $430mn in 2021, the government estimates.
The Cabinet of Ministers approved on December 23 a bill to resume privatization of large state-owned companies, a process suspended last March due to the coronavirus outbreak. With investors now familiar with road shows on Zoom, the government wants the Rada to unfreeze ‘large’ privatizations. Slated to bring almost $500mn to the budget in 2021, the privatization plan calls for selling next year: five thermal power plants, three regional power plants, the former Bolshevik plant, the Odesa port plant, the United Mining and Chemical Company, and Kyiv’s President Hotel.
 37​ UKRAINE Country Report​ January 2021 ​ ​

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