The Cabinet of Ministers disclosed the terms of reprofiling government bonds in the portfolio of the National Bank of Ukraine (NBU). This writes FinClub.
For the operation of the exchange securities will be issued bonds to the amount of 219,56 billion (nominal value of bonds – 1 thousand UAH). Given that the NBU’s portfolio of government bonds at 360 billion, the exchange transaction will fall 61% of the government securities portfolio of the Central Bank. Withdrawn from circulation the bonds maturing in the years 2017-2030.
New government bonds are issued for a period of 7 to 31 years. Just 40 issues, which will be repaid from 2025 to 2047 twice a year – may 10 and November 10.
Interest rate on government bonds, which are repaid from 2025 to 2035, will be fixed and will range from 8.12% to 11,3% (coupon period – 6 months). Rate will decline from 11.3% in 2025 to 9.78% in 2029-m, and of 8.12% in 2035. government securities fixed income will be released on 74,39 billion.
At the same time the bonds that are repaid with by 2036 2047 (interest period 12 months), the yield of 12-month consumer price index minus 100% plus 2.2%. The deflation rate of return is 2.2%. Inflation will be tied to the yield of government bonds with a volume 145,17 billion.
If the maturity date of the bonds or payments of interest income will fall on a holiday or weekend, payments will be made on the next working day.
The minimum amount of repayment scheduled for 2031 year (2 billion UAH), the maximum – from 2032, when the Ministry of Finance will return 12.1 billion UAH per year.
“In the case of the adoption of the National Bank of the decision on the sale of long-term inflation bonds, the Finance Ministry has a priority right to purchase such bonds on terms no worse than the terms on which the Bank will sell these bonds,” – says the decision of the Cabinet 748 of 4 October.
The technology for such operations is simple: the Bank will send a letter to the Ministry of Finance, then the Finance Ministry will have 10 days to decide whether to buy government bonds. If the Ministry of Finance refuses or does not answer in time, the NBU will be able to sell inflation bonds on the open market.
In approved Cabinet conditions of reprofiling there is no possibility of the Cabinet to persuade the Bank to reduce the yield of government bonds in the case of hyperinflation.