Finance Ministry to issue UAH 116.8 bln 15-year government loan bonds at 10.5% interest rate for PrivatBank nationalization

As part of PrivatBank's nationalization, the Finance Ministry of Ukraine will buy all of its shares for UAH 1, will then take part in its additional capitalization through acquiring additional shares in the amount not exceeding the minimum capital requirements calculated by the National Bank, the Cabinet of Ministers said in resolution No. 961 dated December 18 and entitled "Some Issues of Stability of the Financial System."

"The Finance Ministry should conduct... the issue of government domestic loan bonds in the amount of up to UAH 116.8 billion with a maturity period of up to 15 years and income interest rate of no higher than 10.5%, which will be then used by the state to pay for the additional issue of shares of PJSC PrivatBank," reads the document issued on Monday.

According to the document, the Finance Ministry has been also instructed to submit proposals on the need for additional capitalization of PrivatBank after its financial condition is assessed by an internationally recognized audit company.

As reported, Ukrainian Finance Minister Oleksandr Danyliuk and NBU Governor Valeriya Gontareva said earlier Ukraine intends to issue UAH 148 billion worth of government domestic loan bonds to cover the shortage of capital of PrivatBank. The shortage of capital will be liquidated in several stages. At the first stage the Finance Ministry will issue bonds worth UAH 43 billion.

According to the data of PrivatBank, as of October 1, 2016, its capital totaled UAH 30.295 billion, including share capital – UAH 21.257 billion.