American and British traders have purchased 87 percent of Ukraine’s recently issued Eurobonds, according to the Ukrainian Finance Ministry, or MFA.
On Oct. 26, the First Deputy Economic Development and Trade Minister Maxim Nefyodov confirmed the placement of $2 billion in government Eurobonds.
At the time, Nefyodov said Ukraine offered the bonds on government debt to help the state partially balance its books, boost the national bank’s reserves, finance costs and stabilize the exchange rate on the Ukrainian hryvnia.
A Eurobond is a government-issued debt security assurance, denominated in euros, that’s often favored and issued by countries with relatively unstable economies.
The $2 billion in placed bonds were a mixture of 5-year bonds and 10-year bonds, according to the MFA.
British traders quickly acquired 41 percent of the 5-year bonds and 46 percent of the 10-year bonds while American traders took 46 percent of the 5-year bonds and 37 percent of the 10-year bonds.
At the same time, European traders also made cautious acquisitions of the government debt securities, buying 12 percent of the 5-year bonds and 16 percent of the 10-year bonds.
The MFA reports that Ukraine will have boosted its currency reserves by $1.3 billion as about $714 million was needed for servicing debts to creditors on previously issued six-month Eurobonds.
Accounting for the income from Eurobond sales, Ukraine’s international reserves now stand at $18.1 billion in total – enough for the government to cover three months of imports and other obligations, as well as the day-to-day operations of the government and central bank.
It’s not the first time that Ukrainian bonds have proven tempting for American and British traders.
Back in September 2017, traders from London and New York purchased 82 percent of Ukraine’s newly-issued 15-year Eurobonds worth $3 billion and European traders acquired the remainder.
