12:14 Jun. 23, 2016
The loan guarantees agreement is part of bilateral and multilateral economic support for Ukraine
Ukraine expects to issue USD 1 billion worth of eurobonds under the U.S. loan guarantees in August, a source in the government told an UNIAN correspondent.
"We expect to issue [the bonds] in August. We believe this will be a good time for emission," the source said.
However, he drew attention that, before the issue of bonds, Ukraine should conclude the negotiations with the IMF on the Second revision of the four-year reform program, adopted in March 2015, as well as to launch the system of electronic declaration of property.
The governments of Ukraine and the United States on June 3, 2016, signed the declaration of intent and the agreement on USD 1 billion in loan guarantees between Ukraine and the United States as part of arrangements between the two countries' leaders.
The loan guarantees agreement is part of bilateral and multilateral economic support for Ukraine comprising the International Monetary Fund's four-year Extended Fund Facility program. It reflects increasing support for the economic reforms pursued by the government of Ukraine.
Funds worth USD 1 billion, which will be received from bonds to be issued with the U.S. loan warranty, will be transferred to the Ukrainian state budget. They will be spent on social aid to the most vulnerable citizens to protect them against economic impacts including the adjusted gas prices.
This is already the third loan warranty received by Ukraine from the United States. The previous two warranties granted in 2014 and 2015 enabled Ukraine to obtain USD 2 billion on the international capital market at a record low-interest rate and to use them for the implementation of the reform program.
The new eurobonds will be five-year bonds due in 2021, and an interest rate is expected not to exceed 2% per annum.
Reporting by UNIAN