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The total size of registered corporate issues in Ukraine reduced to 3.5 bln hryvnias in 2004

January 18, 2005 | Cbonds

The total size of the issues released by Ukrainian companies and banks, and registered by the State Committee on Securities and Stock Market in 2004, has reduced to 3.5 bln hryvnias (USD660 mln) from 4.24 bln hryvnias in 2003. This data was provided to reporters by Sergey Biruk, the committee member. “Based on the issuers’ reports, 95% of issues registered in 2004 have been placed”, - Biruk said.

The largest issues last year were launched by the following companies: Metalen metallurgical plant (worth 200 mln hryvnias), Velika Kishenia-Finances (30 mln hryvnias), TMM (45 mln hryvnias), Chernomornaftogaz (60 mln hryvnias), Nadra bank (40 mln hryvnias) and Tavrika bank (30 mln hryvnias).

Decrease in amount of registered issues in Ukraine had to do with the absence of major government companies and holdings in the list of issuers. Last year their issues accounted for the lion’s share of the market. For example, South-Western Railways and Ukrtelecom mobile operator registered their issues in 2004 worth 500 mln and 700 mln hryvnias respectively.

ADDITIONAL TAX

Analysts name the decision of the State Committee approved on December 8, 2004 among the negative factors influencing the national corporate debt market. The decision on “Introduction of an obligatory rating system for the securities market participants and instruments” has already complicated the procedure of bond issuance and made it costlier.

Representatives of the State Committee say the credit rating requirement applies only to the issuers that have strategic importance for the country’s economy, monopolies, and issuers with

Government ownership. Biruk expressed an opinion that the committee may reconsider its decision, so that it does not apply to private placements.

Irina Zaria, President of the First Securities Trading System (FSTS), announced FSTS and the Ukrainian Banks Association addressed the committee with a suggestion to forgo the introduction of the obligatory rating system, which at this stage is viewed by the market participants as an additional tax.

Boris Timonkin, CEO, Ukrsozbank, told reporters that at present only one rating agency in Ukraine has been authorized by the government to assign credit ratings. “This is ridiculous, and should be annulled and forgotten”, - Timonkin said.

Based on Reuters data

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