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Need money to rebuild the country, Ukraine wants to sell ‘peace bonds’ to the West

Need money to rebuild the country, Ukraine wants to sell peace bonds to the West - Photo 1.

War on the streets of Ukraine – Photo: BBC

Associated Bloomberg On April 21, it was reported that EU and Ukrainian officials had negotiated around the sale of “peace bonds”. The European Commission has issued advice to Ukraine and said it will monitor and approve the sale of these new bonds.

Similarly, Kiev has also discussed with the US Securities and Exchange Commission (SEC) about the sale of wartime bonds. An international law firm in the US will represent the Government of Ukraine in setting up an SEC-registered “peace bond” offering.

The past “war bond” auctions have helped Ukraine raise the equivalent of $1.5 billion since Russia launched a military operation into the country on February 24.

With the economy expected to shrink by about half in 2022, Ukraine’s financial authorities have struggled to open the sale of bonds to more investors.

Ukraine says it will need at least $500 billion to rebuild the country and repair the damage caused by the fighting.

According to Bloomberg’s own sources, the total financial assistance pledged to Ukraine so far – excluding humanitarian and military aid – has exceeded $10 billion as of March.

This week, German Chancellor Olaf Scholz said he would discuss how to help Ukraine with the 50 billion euros ($55 billion) in aid requested by Kiev.

What are war bonds?

War bonds are sold to finance military operations and production in wartime.

War bonds tend to have lower yields and longer maturities than other government bonds. The repayment period is likely to last for decades. Ukraine’s war bonds are similar in character to the government bonds that the country sells regularly in peacetime and mature in a year.

Ukraine’s first war bond sold on March 1 yielded 11% and has a face value of 1,000 hryvnia/bond, or about $33.

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