On June 3, the Governments of
Ukraine and the USA signed an agreement on loan warranties for Ukraine
amounting USD 1 billion. The agreement had been negotiated by the political
leaders of Ukraine and the USA. On behalf of the Ukrainian Government the agreement
was signed by Minister of Finance Oleksandr Danyliuk, on behalf of
the US Government it was signed by US Ambassador to Ukraine Geoffry Payett and
entitled representative of the USAID mission Joel Sandefur. Thanks to this
agreement, Ukraine will have more leverage to support and protect the its vulnerable
citizens against the impact of economic factors.
The loan warranty agreement is
a part of the bi- and multilateral economic support for Ukraine comprising the
four-year IMF program (Extended Fund Facility). It reflects increasing support
for the economic reforms pursued by the Government of Ukraine. The agreement is
aimed to support economic reform programs of Ukraine which are also supported
by the IMF, USAID and other members of the international community. It should
also facilitate access of Ukraine to the international capital markets.
USD 1 billion which will be
received from bonds issued with the US loan warranty will be transferred to the
state budget. These funds will be used for the social aid to the most
vulnerable citizens to protect them against economic impacts including the
adjusted gas prices.
“On behalf of the Government
and the Ukrainian people I want to thank the USA for their permanent and
sustainable support. This agreement on loan warranties is important for our
economic support and protection of financially vulnerable citizens”, Minister
of Finance Oleksandr Danyliuk said.
This is already the third loan
warranty received by Ukraine from the USA. The previous two warranties granted
in 2014 and 2015 enabled Ukraine to obtain USD 2 billion on the
international capital market at a record low interest rate and to use them for
the implementation of the reform program.
Key facts:
- emission of
Eurobonds amounting USD 1 billion;
- maturity period –
5 years (till 2021);
- record low
expected interest rate (not higher than 2% p.a.) – the lowest interest rate in
the history of Ukraine.
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