OREANDA-NEWS. July 28, 2010. Bloomberg reported this morning that Ukraine could sell debt denominated in Russian rubles for the first time, citing an interview with Deputy Economy Minister Valery Muntiyan on Friday. Ukrainian finance ministry officials met with their Russian counterparts twice to discuss a ruble bond. The Ministry of Finance said two weeks ago that Ukraine would not go ahead with a Eurobond placement in 3Q10 as planned. The ministry held a road show and was seeking to place USD 2 bln in 10-year bonds.

Concorde Capital: we see the issuance of ruble-denominated sovereign bonds as far from a done deal. We question whether the market rate for such bonds (most likely above 10%) would be acceptable to Ukraine’s government. Should demand come from Russian state-owned banks, the parties would still have to agree on the interest rate and deal format, which might not necessarily be via a bond issuance (it may, for instance, take the form of bilateral loans).