Ukraine is sold wholeheartedly
The Cabinet of Ministers of Ukraine approved the issue of Eurobonds for $1 billion under US guarantees. Ukrainian Finance Minister Alexander Danylyuk proudly announced that Kyiv managed to place 5-year Eurobonds at a record low rate for the country of 1,471%.
“Eurobonds”, also known as “Eurobonds”, are securities that can attract finance for a certain period (from 1 year to 40 years). The prefix “euro” in this case is a tribute to the “pioneers” - the Italians, who were the first to issue bonds of this type in 1963. Now they are issued by almost all developed countries and even underdeveloped ones, in any currency, but not in the national one.
The less reliable the issuer, the higher the bond yield - after all, something needs to compensate for the investor’s risks. A phrase consisting of two pleasant-to-hear words “high” and “profitability” actually does not mean anything positive; it is a disaster for the issuer.
"High yields" for those issuing bonds means that investors will have to pay more on the debt.
Even before the Maidan, the economic situation was not ideal; Ukraine had long been hunted; its debts were bought up by the well-known liquidator of “sovereign” economies, the investment fund Franklin Templeton Investments. By December 2013, the yield on Ukrainian Eurobonds reached approximately 12%; by that time, Franklin Templeton had accumulated about 40% of Ukraine's debt obligations.
The chance to escape from the tenacious embrace of “investors” appeared with the signing of the December agreements with the Russian Federation. Then, immediately after the announcement of Russian loans worth 15 billion, the yield on Ukrainian Eurobonds fell to 7%.
As a result, Russia gave Ukraine 3 billion at 5%. But after the Maidan these plans collapsed. Franklin Templeton continued to buy ukrodebts, increasing its share in them to 43%. The yield on Ukrainian Eurobonds rose again to 11,78%, and in the spring of 2014 on Eurobonds with a maturity date in 2015 it reached 14,32%.
Just like a collector buys up someone's debt, relatively speaking, worth $100, for only $40-50, i.e. for 40-50% of its value (because the owner of this promissory note has lost hope of getting at least something from the debtor), Franklin Templeton also bought Ukrainian debt obligations for pennies.
As a result, having frightened all potential investors and creditors with its diagnosis - the Maidan of the Brain, Ukraine was left alone with the IMF, terminators like Franklin Templeton, and the US government - in fact, a dragon that has many heads, but they grow from one point ...
Today Ukraine has been sold wholeheartedly, and there is no owner for it other than the United States. Now Ukraine is not able to make a single decision on its own - neither in foreign policy nor in domestic policy, and even sends the state budget to the IMF for approval.
As for the United States, in case of guarantees for Ukraine, they do not risk anything - the Americans will still draw billions for themselves.
US guarantees are just a time-delayed transfer of ownership of Ukrainian assets under the control of the loan guarantor.
Ukraine will still be unable to pay off its debts. And in more prosperous times, there was no case when Ukraine repaid the loan in full and in accordance with the originally agreed terms. This applies to all $20 billion received by Kiev from the IMF since 1994.
Nobody cares how the current or next president of Ukraine will get out. The maturity of all these Ukrainian securities is five years. I wonder if Poroshenko is writing a letter to his unknown successor: “My dear unknown friend, the new president of Ukraine, you don’t have to pay off these debts - you will say that all this was a bribe from Obama to President Poroshenko. Obama will no longer object.”
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