Ukrainian eurobonds six times oversubscribed
“The first Ukrainian sovereign Eurobond placement after a long interval, the results of which are now being presented, caused a sharp dispute among investors – it was six times oversubscribed,” said Ukrainian President Petro Poroshenko.
“This is clear evidence of the fact that today the entire world is voting with its money to trust Ukraine and the effectiveness of our reforms,” he said at a meeting with leaders of the Ukrainian community in New York on Monday.
The Ukrainian government has not disclosed other results of the placement.
The amount placed in 15-year Eurobonds was $3 billion, the yield – 7.375%. Of this amount, more than half will be directed towards buying back Eurobonds maturing in 2019-2020 with a total face value of $1.576 billion. The new Eurobonds have an amortization structure: repayment will take place in four equal tranches between 2031 and 2032.
The deal was organized by BNP Paribas, Goldman Sachs and JP Morgan. The road show for the Eurobonds took place last week in London, Boston and New York. During the collection, the orders managed to lower the yield of the issuance: initially the benchmark was 7.75%, then it was lowered to roughly 7.625%, and the final range was 7.375-7.5%, the placement will take place at its lower limit. The country’s debt securities caused significant controversy among investors – according to provisional data, the order book contained $9.3-10 billion, with 400 investors participating in the deal.
The new deal will be the country’s first market placement since 2013, when Ukraine sold 10-year Eurobonds amounting to $1.25 billion with a yield of 7.5%. Between 2014 and 2016, Ukraine placed $1 billion in 5-year Eurobonds each year, guaranteed by the US, which enabled the country to borrow at record low rates. For example, last year, the yield on Ukraine’s Eurobonds was 1.471%.
In 2015, 13 of Ukraine’s Eurobond issuances were restructured into a total amount of $14.36 billion and €0.6 billion. It implied exchanging 80% of the amount for new Eurobonds with a four-year extension, and 20% for state derivatives, whose payments in 2021-2040 will depend on the GDP’s growth rate. The coupon rate of all the restructured issuances was set at 7.75%.