Ukraine may place $1-1.5 billion worth Eurobonds this fall to cover the budget deficit and to buy back more GDP warrants, predicts Bank of America Securities. This would follow July’s successful placement of $2 billion worth of 13-year Eurobonds. That deal, at 7.25%, was three times oversubscribed. Potentially chilling foreign interest, the IMF’s planned September review of the $5 billion Standby Agreement with Ukraine may be delayed, BofA warns.
Facing weak investor demand, the Finance Ministry sold on Tuesday only one third the volume of hryvnia bonds as at last week’s auction, and at slightly higher yields. In yesterday’s auction, the government sold the hryvnia equivalent of $35 million, one third for 1-year bonds and two thirds for 3-year bonds, the Ministry reported on Facebook. The weighted average yield for 1-year bonds was 9.28%, virtually unchanged. For 3-year securities, the yield was 10.46% – 46 basis points above the
Fitch, the ratings agency that most closely follows Ukraine, reaffirmed its ‘B’ rating for Ukraine last Friday, with a stable outlook. Japan’s R&I upgraded Ukraine’s sovereign rating last week by one notch, from B to B+, outlook stable. Since March, Standard & Poor’s has given Ukraine a B stable rating. In June, Moody’s brought Ukraine up one notch to B3 stable.
Concorde Capital’s Alexander Paraschiy writes: Looking at the balance of possible positive and negative triggers for Ukraine’s rating, we see a low chance for Ukraine to get any better rating in the next year.
A new Eurobond placement would come on the heels of two large deals:
Ukraine’s international reserves grew to $29 billion in August, the highest level in eight years, reports the National Bank of Ukraine. Boosting reserves, foreign travel by Ukrainians was down sharply due to the coronavirus restrictions and the nation enjoyed a trade surplus.
Ukraine is on track with the IMF, Finance Minister Serhiy Marchenko said Monday on Inter TV’s Details of the Week program. He said: “We are in a dialogue with the IMF, and hope to receive the next tranche. We have two more tranches planned by the end of the year for $700 million each, and in the near future there will be an online conference, that is, it will not be a visit, it will be an online mission of
Timothy Ash retorts from London: “The danger with this official line that things are fine on the IMF front is that politicians are lulled into a false sense of security, when the reality is that this Fund program is in serious trouble. Someone needs to read the riot act to the Zelenskiy Administration that unless they address the mounting list of issues related to the National Anti-Corruption Bureau, the anti-corruption agenda more generally, independent supervisory boards at state companies, PrivatBank
Domestic air flights were down the least of air travel in August, down only 17% yoy to 2,519, reports UkSATSE, Ukraine’s air traffic control agency. By contrast – international flights to and from Ukraine were down 50%, to 8,249, and transit flights through Ukraine’s air space were down 68%, to 5,922. After last spring’s collapse, air flights in Ukraine have steadily recovered: 2,372 flights in April; 3,237 in May; 4,584 in June; 12,195 in July; and 16,690 in August. Flights
By 2023, several key regional airports will be reopened under the ‘Big Construction’ program, President Zelenskiy promised last week on a visit to Poltava airport. “We will add all airports to the program,” he said, referring to second tier airports that have languished since the 1990s. Promising to start rebuilding Poltava’s runway next year, he said: “We will definitely make Poltava Airport part of our ‘Big Construction’ program.”