New issue of US-backed bonds announced

Обзор облигаций 24.03.2015 The Minister of Finance announced a new issue of US-backed bonds to be offered in April or May, in accordance with the IMF agreement. While no details were provided, this issue is very important for Ukraine as it will have a low coupon rate (5-year bonds last year were issued at a 1.85% coupon rate) and financing will be market-based. Investment implications: As the MoF announced the debt restructuring and markets are anticipating the upcoming negotiations with investors, the new issue should occur after the MoF secures an agreement with bondholders. The uncertainty of debt restructuring conditions could widen the spread to the benchmark for new bonds, which is negative for the MoF. At the same time, if lead managers indicate positive demand for new bonds to the MoF, the offering could occur earlier even if an agreement on restructuring terms has not yet been concluded.