Ukraine draws again on Russia aid package with $2 billion bond extension

Reuters News
Posted: Jan 27, 2014 5:02 AM

KIEV (Reuters) - Ukraine's government said on Monday it was extending a $3 billion eurobond for purchase by Russia by a further $2 billion under a $15 billion bailout package offered by Moscow to help the former Soviet republic out of an acute economic crisis.

The government said in a statement the terms would be the same as the $3 billion bond issued in December, meaning it would be over two years at an interest rate of 5 percent.

Russia agreed in December to extend the package of credits and cheaper gas weeks after Kiev spurned a trade pact with the European Union, touching off anti-government protests which have since spiraled into violent unrest in the capital and other cities.

The Moscow bailout has brought some breathing space to President Yanukovich's government, which needs cash to cover external debts of $8 billion this year and boost the central bank's currency reserves, depleted by efforts to support the hryvnia and repay foreign debt.

Social Security Fails
John Stossel

(Reporting by Natalya Zinets; Writing By Richard Balmforth; Editing by Mike Collett-White)