12 de febrero de 2015 / 13:08 / en 3 años

Analysts pick apart IMF's Ukraine pledge

* IMF agrees new rescue facility for Ukraine

* Analysts cast doubt on US$40bn total package

* Debt restructuring remains likely

By Michael Turner

LONDON, Feb 12 (IFR) - Analysts have shot down the US$40bn figure that IMF boss Christine Lagarde said was the estimated total rescue package for war-torn Ukraine over the next four years, claiming the amount of cash likely to be committed will be closer to half that amount.

Lagarde, managing director of the IMF, said Ukraine would be “supported by an Extended Fund Facility of SDR12.35bn (US$17.5bn) from the IMF, as well as by additional resources from the international community.”

She added: “From these various sources taken together, a total financing package of around US$40bn is estimated over the four year period.”

Ukraine’s bonds rallied half a point following the announcement, although they are still trading at distressed levels, with a US$500m deal due in September this year rising to 62.74 from 62.25. Ukraine’s US$1.25bn 2023s hit 53.85 after opening Thursday at around 53.3, according to Thomson Reuters data.

An announcement of a potential ceasefire in the conflict with Russia starting from Sunday also helped support prices.

Analysts, however, dismissed the notion that Ukraine will get substantially more funding than previous commitments, which included a US$17bn Stand-By Arrangement with the IMF.

They added that a restructuring of the sovereign’s debts, involving private sector creditors, would be needed given the government still faces a large funding gap over the coming years.

“This is not a significantly increased IMF programme and Lagarde should not try and sell it as such,” said Tim Ash, head of emerging markets research ex-Africa at Standard Bank.

“The IMF is bringing US$5.8bn in new money to the table. There is US$11.7bn left undisbursed from the previous Stand-By Agreement. So that gets rolled in, to make US$17.5bn in an EFF over four years.”

This puts a large burden on other official creditors to stump up the rest of the funds but analysts are sceptical that they will do so.

“The quick arithmetic is that the rest of the official sector has agreed to provide well more than 50% of the financing of the overall package,” said Richard Segal, a credit strategist at Jefferies.

“We were in this situation before. In theory, the package was fully financed, but in practice the US government and the EU contributed only a relatively small proportion of their share.”

Ash, too, is doubtful that other official creditors will stump up much cash. He estimates that the US could contribute about US$2bn in new loan guarantees, with US$1bn for the first half of this year and another US$1bn later. The EU has also promised US$2bn over two years, he said.

“I would add in another US$2bn from the World Bank for budget support and some other bilaterals,” said Ash. “So this gets to something like US$23.5bn in actual macro financial support - cash.”

With a financing gap estimated by the IMF at US$42bn - a figure that some think is conservative - a debt restructuring will likely be needed to manage Ukraine’s liabilities.

“If Ukraine can meet the conditions of the US$17.5bn facility, we would be encouraged and would support the government in that effort,” David Spegel, global head of emerging markets sovereign and credit strategy research at BNP Paribas, told IFR.

“But I do not think they will be able to do so in the medium-term, meaning delayed loan disbursements and likely default (or mega restructuring) before year-end, especially if there is a sustained peace.”


Spegel highlighted the IMF’s standby loan to Argentina in 2001 as a comparison. The IMF provided a US$14bn loan before the Latin American country engaged in a large debt exchange in June 2001.

“The IMF discussed upping its loan by U$8bn in August,” said Spegel. “Then, Argentina defaulted in December.”

If Ukraine defaults that would create further complications for the IMF, according to Ash, “given its rules about not lending into arrears.”

Another complication is the status of the US$3bn bond issued by Ukraine to Russia, which is due in December but contains a clause that payment could be accelerated if Ukraine’s debt-to-GDP exceeds 60%.

“It seems clear that in almost any scenario, aside from a change of regime in Kyiv, that Russia will play very hard ball and be a hold out in any debt restructuring negotiations,” said Ash.

This, he added, might not be through the Russian state itself but another Russian creditor if the debt is sold on. (Reporting By Michael Turner; editing by Sudip Roy, Julian Baker)

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