OREANDA-NEWS. June 28, 2010. The Government of Ukraine published a long-awaited decree confirming that it will issue bonds in payment of VAT refunds owed exporters.

In accordance with the terms and conditions outlined in a Resolution of the Cabinet of Ministers' dated 12 May 2010, the bonds will cover VAT refunds owed and confirmed by the Government up to 1 May 2010. 10% of the total bond issue will be redeemed every six months following issuance of the bonds, the last 10% tranche being therefore redeemed five years following issuance. The bonds will carry an interest rate of 5.5 percent per annum.

Andrey Verevskyy, Chairman of Kernel, stated: "We of course welcome this initiative by the Government of Ukraine to finally address this long-standing issue, which has been weighing on all export-led industries, the engine of growth in Ukraine. This action by the new Government will largely clean the slate of receivables due by the State of Ukraine to all exporters, and to our Company in particular. Though the rate of interest offered by the State is below market, the bond issue will provide much needed liquidity to exporters in general. As to the grain export business , this initiative comes in time to provide financing to operators for the next grain harvest and will therefore positively impact the farming sector as a whole."