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UPDATE 1-Ukraine govt issues $3 bln bond as Russia aid package kicks in
December 19, 2013 / 3:40 PM / in 4 years

UPDATE 1-Ukraine govt issues $3 bln bond as Russia aid package kicks in

KIEV, Dec 19 (Reuters) - The Ukrainian government said on Thursday it was issuing a $3 billion eurobond over two years at an interest rate of 5 per cent, in what appeared to be the start of a promised Russian aid package worth $15 billion.

The issue, announced in a government order, did not specifically mention any deal with Russia.

But it was almost certainly the first tranche of a $15 billion aid package of credits and cheaper gas - extending up to the end of next year - which Russia has agreed with the former Soviet republic to help it out of an acute economic crisis.

The deal with Russia, Ukraine’s Soviet-era overlord, was put together in Moscow on Tuesday by Ukrainian President Viktor Yanukovich and Russia’s Vladimir Putin, weeks after Kiev spurned a trade pact with the EU, touching off anti-government protests.

Kiev needs cash to cover an external funding gap of $17 billion in 2014 - almost the level of the central bank’s currency reserves, depleted by efforts to support the hryvnia and repay foreign debt - and has won some breathing space with the Moscow bailout.

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