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National Bank to finance government at 11% per annum, and Ukrainian Eurobonds rise sharply in price

The government will issue "military" OVDPs. Photo: NBU

The government will issue "military" OVDPs. Photo: NBU

On February 24, the Cabinet of Ministers adopted a resolution on issuing "military" domestic government loan bonds (OVDPs) in the amount of up to 400 billion UAH. They will be issued in stages, the National Bank will buy them.

The yield rate is 11% per annum, the circulation period is up to 15 years, the coupon period is one year, and the par value of one bond is 1,000 UAH.

"The Ministry of Finance, when drawing up the draft state budget of Ukraine for the corresponding year, should provide funds for the repayment and maintenance of these OVDPs," the document reads.

It should be noted that the issue of OVDPs under such conditions is actually the issue of the hryvnia (money printing) that will have an impact on the acceleration of inflation.

Dollar Eurobonds of Ukraine on February 25, the second day of Russia's military aggression, on the news of Ukraine's stubborn resistance, the growth of its global support and possible negotiations, rose by 25.5-36% of par.

According to Interfax-Ukraine, at 18:00 Kyiv time, the yield on the shortest securities maturing in September 2022 fell to 95.3% from 186% a day earlier, while the price increased from 53.2% to 70.4% of par.

Eurobonds maturing in 2023 were quoted at a rate of 50.1% per annum, in 2024—38.4%, in 2025—32.3% and in 2026—27.1%.

Euro bonds maturing in 2026 were quoted with a yield of 27.4%, in 2030—16.8%.

The rate of GDP warrants soared by 22.8% to 31.2% of the nominal value.

Recall that on February 24 at 04:50 Russian President Vladimir Putin actually declared war on Ukraine, and Russian troops began to invade the territory of our country.

Since then, The Page has been following the situation and regularly informs about the most important events.

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