Ukraine wants to use US-AID to borrow US$1bn in November

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Heavily indebted Ukraine may borrow US$1bn in November via a new sale of US-backed bonds, part of a broader international support package Kiev expects to receive by the end of the year, Reuters reported.

The finance ministry said on Wednesday it anticipated international assistance worth more than US$3.2bn up to the end of 2015, including US$1bn of US guarantees in November.

It also expects to receive two credit payments of US$500m apiece from the World Bank in August and September and €600m from the European Commission.

“It may be a new US$1bn issue of a US-backed Eurobond, not earlier than in November,” said a ministry source.

The finance ministry could not immediately confirm or deny the report of a possible bond sale. Washington announced earlier this year that it could provide up US$2bn in loan guarantees to near-bankrupt Ukraine.

Kiev used the first tranche of the guarantees to back a US$1bn five-year Eurobond issue in May. Citigroup, JP Morgan and Morgan Stanley led the deal.

Ukraine’s budget has swallowed up US$4.7bn of external financing since the start of the year. Major donors to the country said financing would be contingent on the former Soviet republic remaining on track to meet the conditions of its loan programme from the International Monetary Fund.

The IMF approved a US$17.5bn bailout programme in March to support reforms in Ukraine, whose economy has been damaged by a 15-month military conflict with Russia-backed separatists.

Kiev expects the lender to decide on July 31 whether to disburse a second tranche of financial aid worth US$1.7bn. Ukraine has so far received US$5bn from the IMF.

Ukraine is continuing talks with creditors on restructuring US$23bn of external debt.

Ukraine