<b>Ukraine exchanges its bonds</b>
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<b>Ukraine exchanges its bonds</b>

    Headline: Ukraine exchanges its bonds
Source: Euromoney
Date: April 2000
Author: Michael Peterson

Ukraine's lesson in bond destruction

Issuer: Ukraine

Amount: e2.6 billion

Type of issue: Exchange offer

Launched: February 4 2000

Lead manager: ING Barings

Here's the challenge. Find the thousands of individual investors who bought the Republic of Ukraine's retail-targeted bonds, tell them Ukraine can't keep up the payments and persuade at least 85% of them to accept a new, less onerous, bond instead. That was the task facing lead manager ING Barings - with syndicate members Credit Suisse First Boston, Commerzbank and Salomon Smith Barney - when the east European sovereign launched an exchange offer for all its outstanding international issues.

Ukraine began the new century in big trouble. It had to pay $3.2 billion on its debts in 2000 and its foreign reserves stood at only $1 billion. But, unlike Pakistan which faced a similar problem last November, Ukraine couldn't simply turn to a small number of institutional investors to agree a bond restructuring. Its paper was scattered far and wide.

"One of the main difficulties we faced was that there were five different instruments covered by the offer," explains Andrew Dell, head of debt syndicate at ING Barings.

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