Ukraine and the USA sign an agreement on loan warranties for Ukraine amounting USD 1 billion
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.