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NBU Relaxes Access to International Capital Markets for the Ukrainian Business

NBU Relaxes Access to International Capital Markets for the Ukrainian Business

Ukraine
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With effect from 27 April 2021, the Ukrainian entities have been granted the right to make regular interest payments and final capital repayment under Eurobonds and other own debt securities traded on foreign stock exchanges in excess of a so called EUR 2 mln e-limit. In addition, the entities are now allowed to accumulate and periodically replenish foreign currency on the bank accounts in the amount of principal and interest due on the notes on the nearest repayment date.

Historically, Eurobond offerings by the Ukrainian issuers have been structured through an offshore SPV issuing the notes and on-lending the proceeds to the Ukrainian company. In turn, the offshore SPV applied the proceeds from the loan to fund payments due on the notes. Now, the Ukrainian companies may directly issue Eurobonds and pay interest and principal to the noteholders which reduces the overall costs for the Ukrainian issuer. The accumulation of foreign currency by the issuer on debt service and reserve accounts to make debt repayments is typically required by the lenders and noteholders in project financings.  

Relevant changes have been introduced by the Resolution of the Board of the NBU of 23 April 2021 No 34 that amended the Resolution “On approval of the Regulations on protection measures and determination of the procedure for carrying out certain operations in foreign currency” of 02 January 2019 No 5.

By Igor Krasovskiy, Partner, and Oleh Zahnitko, Partner, Integrites

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