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Ukraine Plans $1.3Bln Eurobond

Ukraine plans to issue a $1.3 billion eurobond in 2010 — its first since the global economic crisis — to plug an anticipated budget deficit and repay accumulated debt, government figures showed on Monday.

Prime Minister Mykola Azarov's government also foresaw drawing on $2 billion of credit from an International Monetary Fund program and $500 million from the World Bank during the year, the figures showed.

Separately, the European Bank for Reconstruction and Development said it was ready to give the country more than 1 billion euros in loans and investments this year, almost the same volume as in 2009.

EBRD President Thomas Mirow told a news conference that the terms for issuing would depend on how quickly Ukrainian authorities agreed to conditions.

Ukraine's new leadership is expecting word soon on a sought-for $12 billion credit package over 2 1/2 years from the IMF to turn around a hard-pressed economy whose main export markets were savaged by the financial downturn.

Deputy Prime Minister Sergei Tigipko, Ukraine's point man on negotiations with the IMF, was quoted by the government press service on Monday as saying in Washington that Kiev might receive $19 billion to $20 billion from the fund.

Before leaving for Washington on April 20, he said Ukraine was seeking $12 billion in credit and the government press service gave no explanation for the difference between the two figures.

To meet IMF demands, it has put together a draft budget for 2010, which it hopes will be approved by the parliament this week.

The government figures, in a document that outlined expected borrowing under the 2010 budget, gave no yield for the planned eurobond nor say which banks had been chosen to lead the issue.

The last time the Ukrainian Finance Ministry went on to the bond market was in 2007, when it issued five-year bonds for $500 million with a 6.385 percent coupon.

In 2008, after a road show with an indicative volume of several hundred million dollars, the government backed off going to the market when it saw how high the price would be.

A week ago, however, the state-run Ukreximbank issued a five-year eurobond for $500 million with a coupon of 8.375 percent.

The government figures showed that Ukraine was faced with paying out 27.227 billion hryvna ($3.403 billion) to domestic creditors this year — the result of accumulated short-term and medium-term securities now maturing.

They showed Ukraine's foreign debt coming due this year to be 10.772 billion hryvna ($1.346 billion).

The Ukrainian government has made a commitment to the IMF to try to hold its budget deficit to 6 percent of gross domestic product.

The figures showed that the government aimed to hold the hryvna at 8 per dollar during the year. It intended to issue T-bills over the year totaling 66.190 billion hryvna, 47.853 billion hryvna of which would go to covering the deficit.

The government finalized its draft budget last week only after Ukraine had agreed on a new price for its huge supplies of gas from Russia.

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