The National Bank of Ukraine allowed Ukrainian banks to invest in foreign bonds

The National Bank of Ukraine by its Resolution effective as of 10 August 2017 allowed Ukrainian banks, which have a general license for currency exchange operations, to buy certain debt securities issued abroad without obtaining an individual license for that, as was required earlier.

This novelty applies without any qualifications to buy back by a bank of debt securities issued by a foreign company under loan participation notes structures to finance such bank.

Also, this novelty applies to the purchase of debt securities if all the following requirements are met:

- an issuer of debt securities is an international financial organisation or the government of the United States, Japan, Germany, the United Kingdom, France, Italy or Canada;

- as of the acquisition date, the issuer has an official credit rating not lower than AA – / Aa3, confirmed by at least two of the world’s leading rating agencies (Fitch Ratings and/or Standard & Poor’s and/or Moody’s);

- debt securities are denominated in US Dollars, Yens, Euros, Pounds Sterling or Canadian Dollars;

- a period between the date of purchase of securities by a bank and their maturity date does not exceed five years;

- a transaction for sale and purchase of securities is carried out by a bank only with a non-resident(s) abroad. 

 

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