Ukrainian president Viktor Yushchenko's announcement on September 8 that he had sacked his entire cabinet, including prime minister Yulia Tymoshenko, could hardly have come at a worse time for the investment banks appointed to arrange the sovereign's latest Eurobond issue.
Citigroup, Deutsche Bank and UBS have been mandated as joint bookrunners on its planned €600 million denominated 10-year issue, and had planned to hold a roadshow during the week of September 12. This was swiftly put on hold. The issue will be Ukraine's first denominated in euros since a restructuring of its debt in 2000 after the Russian financial crisis of August 1998.
The City of Kiev and state-owned Ukreximbank also plan issues in the third quarter. Ukreximbank picked Credit Suisse First Boston and UBS to arrange its dollar-denominated deal, and was looking to press ahead in late September. Kiev has chosen CSFB and Citigroup to lead a likely $250 million issue.
Yushchenko has appointed long-time ally Yuri Yekhanurov, governor of Ukraine's eastern region of Dnipropetrovsk, as acting prime minister.
Analysts are divided over the implications of the dismissals. Although some argue that the move is negative, as it puts in danger the chance of forcing through reforms, others such as Aton Capital believe the move to be positive.