Ukrainian municipal bonds to gain access to European market - NDU

MOSCOW. Dec 30 (Interfax) - National Depository of Ukraine (NDU) and KDPW, the central depositories of Ukraine and Poland, respectively, have established a correspondent relationship, or link, in order to make transactions classed as delivery of securities without payment, which will permit cross-border transfers of Ukrainian municipal bonds, records of which are being kept by NDU.

"The agreement signed between our central depositories is part of our support for the Ukrainian financial market and opening the road for Ukrainian bodies of local government toward offering municipal bonds on international markets," Ukrainian media quoted KDPW President Maciej Trybuchowski as saying in an NDU press release.

KDPW will ensure record keeping of such Ukrainian securities in Poland's depository system.

Currently, securities with a total nominal worth of more than 3.1 billion hryvni issued by Kiev, Kharkov, and Lvov city councils are being traded in Ukraine.

According to head of the NDU board Alexei Yudin, the offering of Ukrainian municipal bonds on the European market will help attract capital and create ways of enhancing the flow of foreign investment into Ukraine.

"I am sure that the agreement between our institutions is the beginning of long-term cooperation and will be useful for both Ukrainian and Polish markets. Rehabilitating of the Ukrainian cities and economy will require considerable finance resources, and the capital market should play an important role in this. We are very well prepared for this, both in terms of infrastructure and organizationally," KDPW Vice President Slawomir Panasiuk said.

In 2020, KDPW passed authorization and obtained a permit under the European Union's Central Securities Depositories Regulation (CSDR) in confirming its compliance with EU unified legal requirements for central securities depositories, the NDU press release said. When building a correspondent link with the Polish depository, an important aspect was that the NDU passed necessary procedures and audits in terms of the possibility to open a correspondent account as required under the CSDR, it said.

NDU is now working to further expand the correspondent link with KDPW, including possible of record keeping of corporate bonds and other financial instruments.