Ukraine issues costly bond as it hopes for IMF funds

Significance

These payments come shortly after the ministry placed a 725-million-dollar, six-month Eurobond with private investors. The government seems to have had no alternative to this costly means of covering upcoming debt obligations later this year as it waits for a resumption in IMF lending.

Impacts

• If no IMF tranche is forthcoming, new disbursements may have to await a new lending programme in March.
• Renewed IMF lending should unlock other multilateral financing including 800 million dollars (World Bank) and 578 million dollars (EU).
• An agreement to raise gas prices may have political repercussions for the government and ruling coalition.