Ukraine is likely to issue a new Eurobond in October, after a functioning government was finally installed in August.
The sovereign is understood to be considering an $800 million to $900 million deal, which should also open the way for the country’s corporates to return to market. Many Ukrainian companies have been forced to embark on modernization programmes as a result of higher energy prices, and are expected to fund this using the debt markets.
More stable politics
President Viktor Yushchenko finally agreed to nominate his rival, and former president, Viktor Yanukovich, as prime minister after several months of political limbo following parliamentary elections in March. Had Yushchenko failed to accept the nomination, further elections would have been likely.
Despite the uncertainty, Ukraine received strong FDI flows in the first half of 2006 of $1.8 billion, largely thanks to the acquisitions of its banks by foreign players, including BNP Paribas. The level was 232% up on the same period last year, according to Ukraine’s statistics office. Financial sector investments were $592 million, real estate at $279 million, and metallurgy at $129 million. Merrill Lynch predicts the trend will continue, and that the total for the full year 2006 will reach $3 billion.