Ukraine could issue new US-backed bonds shortly

Обзор облигаций 24.04.2015 The US guarantee for the new US$1bn Ukrainian Eurobond offering will be available, effective today for one month, according to Interfax Ukraine and an USAID report. No additional details of a possible issue were released beyond announcing that the guarantee covers all principal and interest repayments. Investment implications: Last year's US-backed bond issuance carried a 1.844% coupon rate at a 28bp spread to the benchmark. As 5-year US Treasury bonds currently trade below 1.40%, we could see a coupon rate for the similar maturity at about 1.70% or lower, taking into the account the new EFF program from the IMF. However, a longer maturity could be offered as it would decrease refinancing needs in 2020.