You're reading: Ukraine continues talks on possible ruble-denominated bond issue

Ukraine is studying the possibility of issuing bonds denominated in Russian rubles, but is not yet planning to borrow because of unfavorable conditions on external markets, the country's Finance Minister Fedir Yaroshenko told reporters in Kyiv on July 7.

"We are studying this topic now, how the market is behaving, and working with the Russian banks VTB, Sberbank of Russia, and VEB. We will be selecting the best options available. But the situation now is not the best, there is instability on world markets," Yaroshenko said.

As reported earlier, the Ukrainian government is negotiating the organization of a ruble-denominated bond placement with major Russian banks, but the volume and timing has yet to be determined.

Senior economist at the Ukrainian investment company Dragon Capital Olena Belan said not long ago that the country might be able to raise some $500 million with such a bond placement.

Ukraine’s state budget for this year presupposes the country borrowing $4.5 billion with bonds placed abroad and another $500 million from the World Bank. Ukraine placed ten-year Eurobonds to the tune of $1.5 billion yielding 7.95% per annum in mid-February, and another $1.25 billion worth of five-year Eurobonds yielding 6.25% in the first half of June.