KYIV, Jan 4 – Ukraine borrowed $340.7 million for 6 months from Deutsche Bank AG late December 2020 as the government needs cash to bridge financing gap until the International Monetary Fund resumes lending, the Finance Ministry reported Monday.

The money was provided by Deutsche Bank’s London branch at the rate of LIBOR plus 5.76% and can be repaid ahead of schedule in case of a significant change in price of Ukrainian eurobonds, the ministry said.

The borrowing comes on the heels of raising $600 million from an issue of eurobonds in mid-December that will mature in 2033 with a yield of 6.2%, according to an industry source. BNP Paribas and Goldman Sachs helped to organize the eurobond issue.

The government also raised at least UAH 75 billion ($2.7 billion) via selling short-term treasury bills on domestic market in December, underscoring a borrowing spree for Ukraine as the country is facing financial crunch.

The IMF suspended lending to Ukraine in July amid concerns the government has postponed economic reforms and inefficient measures to fight corruption, withholding about $1.4 billion in loans in the second half of 2020.

Prime Minister Denys Shmyhal said the IMF may resume lending to Ukraine in February or March if the government can prove that it had restarted economic reforms and made progress in battling corruption.

Ukraine in July placed 12-year eurobonds maturing in March 2033 in the amount of $2 billion with a yield of 7.253%. Goldman Sachs International and J.P. Morgan were joint lead managers and joint dealer managers of the transaction.

The EU in December allocated EUR 600 million to Ukraine after a long delay in a tranche of macro-financial assistance to help the country fight COVID-19 pandemic, but any other assistance will require proof of reforms among other commitments.

The Finance Ministry also raised a private loan of EUR 250 million from Cargill Financial Services International, Inc in August 2020 with rates at 5.95% for contracts with maturity in three years and 6.85% with maturity in five years.

Overall, Ukraine's external borrowings in 2020 amounted UAH 232.3 billion, or 92.4% of the plan, and domestic borrowing was at UAH 389.2 billion, or 94.6% of the plan, according to the Finance Ministry. (tl/ez)