(Bloomberg) - Ukraine raised 8.1 billion hryvnia ($277 million) in a sale of war bonds, its latest fundraising effort to tap into the global support for the country in its fight against Russia’s invasion.
The country also paid about $300 million of bond interest to international investors due Tuesday, honoring its financial commitments amid a devastating conflict. Yuriy Butsa, Ukraine’s debt chief, said that the government is looking at other fundraising options, including foreign currency issuance, and is in talks with the IMF and World Bank for emergency help.
“We had an investor call yesterday, and we see a lot of requests of how funds can support us,” he said in an interview on Bloomberg Television. “We’re looking at ways to attract not only in local currency, but also in dollars, euros.”
The war bonds are one of a number of crowdfunding measures by Ukraine to raise money for both its armed forces and civilians as the country faces down a vastly bigger military force. The individual bonds yield 11% and had a par value of 1,000 hryvnia -- about $33.
Ukraine’s central bank set up a special account last week where people around the world can donate, and the government shared details of crypto addresses to raise funds in Bitcoin and other digital tokens.
By Tuesday morning, those accounts had received more than $17 million, according to blockchain analytics firm Elliptic. Including NGOs providing support to the military, total donations amount to $24.6 million, it said.
Tough Sanctions
The various funding campaigns are piggy backing on the global condemnation of Russian President Vladimir Putin’s invasion of its neighbor.
Foreign governments have ramped up sanctions, cut banks out of the crucial SWIFT messaging system and closed airspace to Russian aircraft. FIFA, international soccer’s governing association, banned Russia’s national and club teams from all competitions.
Support for Ukraine has also been driven by revulsion at civilian deaths, including a number of children. Many have also rallied around President Volodymyr Zelenskiy, who’s been hailed as a wartime hero at home and elsewhere for his resistance to the Russian invasion.
Buying Ukraine’s war bonds on Tuesday wasn’t easy for fund managers, given technical difficulties around the sale. Concerns over the settlement process for the bonds and the lack of information meant that some international bond funds remained on the sidelines.
Other money managers have been looking at Ukraine’s other outstanding bonds as inexpensive, but high-risk investment. Gianni Za, head of asset management at AZ Swiss & Partners SA, said he’s been considering the January 2030 debt, but wants to see better news on the conflict before buying.
“Ukrainian bonds are attractive in our view,” said Alberto Gallo, a portfolio manager at Algebris UK Ltd. He said that Russia will remain isolated from financial markets, Ukraine could align itself closer to Europe. “Many companies have very low leverage and some even survived the last crisis without any restructuring.”
A recovery is still a long way away. Most of Ukraine’s government bonds, already trading at some of their lowest prices ever, dropped further on Tuesday.
(Adds details from interview with Ukraine’s debt chief)
By Fergal O'Brien, Daryna Krasnolutska and Priscila Azevedo Rocha
