Naftohaz signs $500M worth loan agreement with Citibank, Deutsche Bank

On Dec. 30, 2016, Naftohaz of Ukraine NJSC signed a euro-denominated revolving credit facility for gas purchase in the equivalent of $500 million with Citibank and Deutsche Bank.

As reported by Censor.NET citing the statement by the press office of Naftohaz, the facility is secured by the World Bank's guarantee, which, in turn, is secured by the sovereign guarantee issued within the formation of the energy fund according to Resolution No. 876 of the Cabinet of Ministers of Ukraine dated Nov. 30, 2016 "On the provision of the International Bank for Reconstruction and Development with the sovereign guarantee under obligations of Naftohaz of Ukraine NJSC."

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The guarantee is valid for a term of four years, with two years available for gas purchase and two years for repayment. The guarantee of the World Bank and the credit facility are highly cost-effective compared to other loan agreements of Naftohaz. According to the funding conditions under the credit facility, Naftohaz will continue buying gas under eligible existing contracts, switching from pre-payment to post-payment terms.

Payments to suppliers will be secured by letters of credit issued by Citibank and Deutsche Bank, which will convert into loans when payments are made. Naftohaz will repay those loans within twelve months upon the receipt. The World Bank guarantees the repayment of the loans to the international commercial banks.

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Under this credit facility, Naftohaz will be able to purchase gas from both western and eastern directions. Decisions to do so will depend on the competitiveness of gas supply proposals.

The facility will also allow Naftohaz to extend its track record and longer-term relationships with the international banking community.

"The program is a result of twelve months of meticulous work. These funds will enable Naftohaz to ensure a stable gas supply to Ukrainian consumers this winter," Naftohaz CEO Andrii Koboliev said.

In 2015, Naftohaz received a $300 million revolving loan from the European Bank for Reconstruction and Development to purchase gas from European suppliers.

Источник: https://censor.net.ua/en/n422021