Kyiv's Eurobond placement near collapse - source
KYIV. June 22 (Interfax) - The city of Kyiv could fail to place an issue of Eurobonds totaling $300 million because the maximum coupon rate set by the Ukrainian Finance Ministry is unrealistically low, a financial market source told Interfax.
"Before the road show began the Finance Ministry said 7.8% was the maximum rate for the bond issue. Given that another issue of Eurobonds by Kyiv maturing on November 6, 2015 is currently trading at 8.5%, the bonds being offered by the city at 7.8%, in an extremely negative market, have attracted little interest from potential investors," the source said.
"Kyiv city officials expect to receive permission from the Finance Ministry to raise the rate. But the Finance Ministry argues that borrowing at an elevated rate will only make the city's financial condition worse. It is already having difficult paying its debts," he said.
The road show for the Eurobond issue began on June 14.