Bloomberg News

Ukraine Has Enough Funds to Service Debt for Several Months

October 05, 2011

(Updates with quote in second paragraph and comments on Economy Ministry from sixth paragraph.)

Oct. 5 (Bloomberg) -- Ukraine has sufficient funds to service its debt “for several months,” Deputy Prime Minister Serhiy Tigipko said.

“There is a certain reserve of funds in the state treasury’s account to allow for comfortable servicing of debt for several months,” Tigipko told reporters today at a weekly government meeting in the capital, Kiev.

A possible Eurobond sale will depend on global-market conditions, while Ukraine isn’t ready to complete the transaction “at any price,” he said. “If markets are good, we will have to issue debt, if markets are bad -- we must not.”

Ukraine is negotiating with the International Monetary Fund over the release of the third tranche of a $15.6 billion bailout program. The government planned to tap international debt markets to help finance this year’s budget deficit, which may reach 3.5 percent of gross domestic product, according to a bill submitted to parliament last month.

Ukraine should make “three or four” legislative changes to qualify for about $1.5 billion in financing from the World Bank and the European Union on “very good terms,” Tigipko said.

This year’s budget envisages 62.3 billion hryvnia ($7.78 billion) in debt repayments and 23 billion hryvnia of debt servicing, the head of the Economy Ministry’s financial directorate Serhiy Chekashkin said today in a statement on the ministry’s website. As of Sept. 26, the government had spent 30.4 billion hryvnia on debt repayments and 15.6 billion hryvnia on servicing, according to the statement.

On Sept. 28, the government paid 4.9 billion hryvnia on debt issued between 2006 and 2008. “Ukraine is making timely payment of its debt and its servicing, in line with the schedule,” Chekashkin said.

--Editors: Andrew Langley, Douglas Lytle

To contact the reporter on this story: Kateryna Choursina in Kiev at kchoursina@bloomberg.net

To contact the editors responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net;


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