Ukraine will convert the remaining half of its $2 billion debt to VTB into eurobonds, VTB Chairman Andrei Kostin told the press in Kyiv.
VTB allocated a six-month bridge loan to Ukraine in June 2010 (ahead of sovereign eurobond placement and receipt of the first tranche of an IMF loan) totaling $2 billion at 6.7% per annum. Later VTB passed Ukrainian loan rights to VTB Capital. Payments were due in June 2012 as the six-month loan was extended three times to a total of 1.5 years. Ukraine signed a deal with VTB Capital in late May 2012, according to which $1 billion and interest on the entire loan was to be paid on June 6, 2012 and the rest on June 4, 2014.
In accordance with the deal, Ukraine issued $1 billion in bonds.
The remaining part of the debt to VTB will be repaid in a similar way.
“This will also be eurobonds, which Ukraine has already issued,” Kostin said.
“The term will probably be around two years. Naturally it is too early to set the interest rate, but it will be a market rate,” he said.
