Ukreximbank to re-profile its external debt obligations starting with a three month extension of its 2015 bond

4/16/15

The Ministry of Finance takes note of the April 14, 2015 Resolution No.249 of the National Bank of Ukraine (NBU) on "Certain issues of carrying out transactions on change of terms of borrowings under external debt obligations" obliging the Bank to re-profile its 2015 Eurobond. The Ministry supports Ukreximbank’s requested 3 month maturity extension of the 2015 Eurobond to enable it to negotiate a maturity extension of not more than ten years with no principal and no interest reduction.


As per the resolution of the Cabinet of Ministers adopted on 4 April, the Ukreximbank 2015 Eurobond is included in a list of sovereign and sub-sovereign debt obligations which must be re-profiled in order to meet target 1 under the IMF EFF. A failure to re-profile the 2015 Eurobond would make it impossible for Ukraine to meet the targets established in the EFF because it is part of the $5.2 billion of public sector debt falling due in 2015 which must be deferred.

Although the 2015 Eurobonds and other public debt instruments of Ukreximbank and Oschadbank are included in the perimeter of the forthcoming debt operation, due to the special considerations applicable to state-owned banks they will only be required to re-profile these obligations (i.e. extend the maturity thereof). No principal or coupon reduction is required for these instruments to meet the EFF targets.

All requirements of the EFF, with respect to the forthcoming debt operation, must be satisfied in order for there to be no interruption in the essential financial support being provided to Ukraine by the IMF and Ukraine’s other international partners. Failure of Ukraine to adhere to its EFF targets would create significant risks for Ukreximbank, as well as for Ukraine.

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