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Ukraine expects to receive $1 bln in U.S. loan guarantees by end of September

Ukraine expects to receive $1 billion of loan guarantees from the U.S. Government by the end of September and to issue Eurobonds.
Ukraine expects to receive $1 bln in U.S. loan guarantees by end of September

“We think, [it will happen in] the end of the month,” , a source in the government told UNIAN. The receipt of funds has become possible following the positive decision of the International Monetary Fund to resume lending to Ukraine, and the country will receive the third tranche of loan funds under the Extended Fund Facility approved by the IMF in March 2015.

On June 3 the government of Ukraine signed an agreement with the U.S. government on the provision of loan guarantees worth US$ 1 billion in the framework of agreements reached by leaders of both countries.

The agreement aims at facilitating the program of economic reforms in Ukraine, which is supported by the International Monetary Fund, the U.S. Agency for International Development and other members of the international community, as well as ensuring continued access to capital markets for Ukraine.

The funds to the tune of US$1 billion that will be raised through the issue of bonds under U.S. loan guarantees will be channeled to the state budget’s general fund and invested in the social security of the most vulnerable groups, also due to the increase in gas prices.

This is already the third loan warranty received by Ukraine from the United States. The previous two warranties granted in 2014 and 2015 enabled Ukraine to obtain $2 billion on the international capital market at a record low-interest rate and to use them for the implementation of the reform program.

The new Eurobonds will be five-year bonds due in 2021, and an interest rate is expected not to exceed 2% per annum.