Concorde Capital Research: NBU allows Ukrainian banks to freely purchase their own Eurobonds

August 11, 2017 - Cbonds

 

The National Bank of Ukraine (NBU) announced in an Aug. 9 press release it has made it easier for banks to purchase their own international Eurobonds. It has also eased the purchase by banks of sovereign Eurobonds of G7 countries with ratings of no less than AA-/Aa3 and maturity of no longer than five years. While earlier a Ukrainian bank had to apply for an individual license for such purchases, now it can do such transactions by using its general license, the NBU commented.

Currently, three Ukrainian banks have Eurobonds outstanding, including Oschadbank (OSCHAD), Ukreximbank (EXIMUK) and PUMB (PUMBUZ). There are also three Eurobond issues of Privtabank (PRBANK), which were bailed-in in late 2016, based on Ukrainian legislation.

Alexander Paraschiy: As we highlighted in our comments on the interim financial results of Oschadbank and Ukreximbank, their Eurobonds are currently the most expensive source of their funding. Therefore, it would be wise for them to consider their partial purchase or early redemption in order to reduce their average cost of funding and interest expense. The approved regulation makes such operations easier for the banks. This may also play to support the prices of these bonds. All this leads us to maintain our bullish view on OSCHAD, EXIMUK and PUMBUZ notes.
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Issuer, issue numberOschadbank, 8.875% 20mar2025, USD
Type of debt instrumentInternational bonds
Redemption typeAmortising
Issue statusoutstanding
Type of placementPublic
Par, currency of issueUSD 200,000
Amount500,000,000
ISINXS1273034444
End of placement09/01/2015
Coupon8.875% until 20.09.2015; 9.625% until 20.03.2025;
Coupon frequency2 time(s) per year
Settlement date03/20/2015
Maturity date03/20/2025
Issue ManagersBookrunner: Exch/Restr.
Trading floorIrish S.E.
Issuer: Oschadbank
Issuer profile:
Oschadbank is a state-owned bank, one of the largest financial institutions of Ukraine.
Outstanding issues:
2 issuesUSD1,200,000,000
Issuer rating:
IBI-RatingSuspended/National Scale Rating08/31/2015
UCRAWithdrawn/National Rating Scale08/01/2013
Moody's Investors ServiceCaa3/PositiveLT- foreign currency08/30/2017
Moody's Investors ServiceCaa2/PositiveLT- local currency08/30/2017
Moody's Investors ServiceB1.ua/National Scale (Ukraine)08/30/2017
Fitch RatingsB-/StableLT Int. Scale (foreign curr.)07/25/2017
Fitch RatingsB-/StableLT Int. Scale (local curr.)07/25/2017
Fitch RatingsAA(ukr)/StableNational Scale (Ukraine)07/25/2017
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