Kyiv's total debt comes to UAH 10.5 b, UAH 400 m to be repaid in 2013, says official

Kyiv is mulling an issue of long-term eurobonds worth $700 million instead of eurobonds worth $550 million maturing in 2015 and 2016, Deputy Head of Kyiv City State Administration Ruslan Kramarenko has said.

"We are considering the possibility of optimizing our debts. Financial analysts are proposing that we 'repackage' our debts on eurobonds maturing in 2015 and 2016 for more long-term securities with cheaper rates. Now we are in consultations. Here we need the will of the government and the Finance Ministry," he said in an exclusive interview with Interfax-Ukraine.

"We want at the expense of foreign loans 'to repackage' both external and internal debts. We have an idea that instead of eurobonds for $550 million maturing in 2015 and 2016, to issue bonds for $700 million maturing in 2024, and use the difference of $150 million to repay bonds in the national currency. The currency rate might stay the same at 8-9%, and a smaller debt and a rate of 12-13% will be in the hryvnia," said the official.

According to Kramarenko, the total debt of the Kyiv budget is currently UAH 10.54 billion, $550 million of which are eurobonds, and the rest – internal borrowings. Some UAH 1.351 billion will be used for servicing debts this year. This sum is included in the draft capital budget.

The eurobonds will mature in 2015 and 2016, and the administration has this year to repay UAH 400 million on internal debts to Bank Khreschatyk. The repayment period expires in September, but given the fact that the administration had ending funds on its accounts, UAH 250 million of the sum has been repaid in early 2013 not to pay 20% per annum. Thus, Kyiv City State Administration saved about UAH 40 million, Kramarenko said.