Fitch Ratings has affirmed the Ukrainian City of Kyiv’s Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDRs) at ‘B-‘, Fitch Ratings said in a press release on September 21. Simultaneously Fitch has upgraded Kyiv’s National Long-Term Rating to ‘A(ukr)’ from ‘A-(ukr)’. The Outlooks are Stable.
Fitch said that the upgrade of the National Rating reflects the improvement in Kyiv’s credit strength following the exchange of $101.15 million of the non-restructured part of $250 million LPN due in 2015 for new LPN due in 2022.
Fitch has also assigned PBR Kyiv Finance PLC’s $115.072 million loan participation notes (LPN) due December 2022 a ‘B-‘ rating.
“The issuer is the city’s financial SPV, and the LPN were issued on a limited recourse basis for the sole purpose of financing a loan made to the city. Thus they represent direct, unconditional, unsecured and unsubordinated obligations of Kyiv and at all times rank pari passu with all its unsecured and unsubordinated obligations,” Fitch said.
As was reported, Kyiv’s 2015 eurobonds were included in the perimeter of the debt operation envisaged by the International Monetary Fund’s Extended Fund Facility (EFF). They included two issues of eurobonds: 10-year $250-million eurobonds maturing on November 6, 2015, with a coupon rate of 8% per annum and five-year $300-million eurobonds maturing on July 11, 2016, with a coupon rate of 9.375% per annum.
On November 23, 2015, Kyiv offered bondholders to exchange its eurobonds for sovereign eurobonds of Ukraine falling due in 2019-2020 and state derivative securities. In keeping with the offer, one bond with a nominal value of $1,000 was to be swapped for two sovereign eurobonds maturing in 2019 and 2020 whose face value is $375 each and a rate of 7.75% per annum and state derivatives with a conditional value of $250. Interest accrued on the bonds was to be capitalized and added to the principal amount of new bonds.
As part of a debt restructuring operation, the government of Ukraine on December 18, 2015, allowed the conversion of Kyiv’s debt on 2015 eurobonds worth $117.394 million and 2016 eurobonds worth $233.672 million into state debt.
The restructuring of the 2015 eurobonds was backed by 59.51% of their holders and that of 2016 eurobonds – by 90.9%. According to a source of Bloomberg, the 2015 eurobond offer was rejected by London-based Franklin Templeton Inv Mgmt Ltd., which held 32% of 2015 eurobonds. After that, according to available information, negotiations were held with that creditor.
Kyiv City Council on September 4, 2018 completed the restructuring of its outstanding foreign debt by exchanging eurobonds with a yield of 8% and maturing in 2015 with a total nominal value of $101.149 million for new loan participation notes (LPN) falling due on December 15, 2022, with a yield of 7.5%
The Dobrobut medical network plans to open a polyclinic with a space of 2,000 square meters in the settlement of Sofiyivska Borschahivka in February 2019, Dobrobut Director General Oleh Kalashnikov said at a press conference at Interfax-Ukraine. Investment in the clinic will be UAH 80 million.
“It will be an adult and children’s polyclinic, a one day’s surgery, a recovery ward and 14 rooms for a children’s hospital. We will fully provide endoscopic diagnostics. It would be a fully featured hospital. We view this as an experiment to some extent, because finally, in our opinion, we will open clinics in Boryspil, Brovary and Irpen and cover a larger space,” Kalashnikov said.
At the same time, commenting on plans for regional development in the near future, he said that today the network is focused on the Kyiv’s medical services market.
“For the next two or three years, our plans are focused on Kyiv,” he said.
Brussels Airlines, the subsidiary of Deutsche Lufthansa Group, will start flying to Kyiv from October 17, 2018, Lufthansa General Manager for Ukraine, Armenia, Belarus, Georgia, Azerbaijan and Turkmenistan Rene Koinzack said at a press conference in Kyiv on Wednesday. “The first flights will be on October 17. Brussels and the capital of Ukraine will be connected, which is very important for us,” he said.
Koinzack said that Brussels Airlines also fly to Africa, which creates additional opportunities for Ukrainians.
Lufthansa Group in the field of passenger air transportation, along with the same name brand, includes Austrian Airlines, Swiss Airlines, Eurowings (including Germanwings) and Brussels Airlines, as well as a share in Turkey’s SunExpress. In addition, the group includes logistics, technical and service companies.
The new Georgian Myway Airlines from October 5, 2018 will launch regular flights to Kyiv (the Boryspil international airport) from Tbilisi, the airline wrote on its Facebook page on September 12. The regular Tbilisi-Kyiv-Tbilisi flights will be serviced twice a week – on Mondays and Fridays. From October 24, Myway will add one more flight on Wednesdays.
Myway Airlines was founded in 2018. It is a project of China’s Hualing Group.
Its fleet consists of two Boeing 737-80 aircraft.
Sweden’s IKEA, the largest furniture and household goods retailer in the world, plans to expand its network in Kyiv and other cities of Ukraine after testing the first store in Kyiv-based Ocean Mall, which will be opened in summer 2019. “We want to study and understand the market with the first store, and then, when we feel that we understand the market, we will open other stores in Kyiv and other cities. One year is ideal for studying to get a full cycle… Also we are working to ensure the introduction of online sales as fast as possible,” IKEA Southeast Europe CEO Stefan Vanoverbeke said in an interview with Interfax-Ukraine.
According to him, the area of the first IKEA store in Kyiv will be about 6,000 square meters, the range of goods will include furniture and accessories.
“The store will be divided into locations. We call them room sets. It is a kind of room where we show solutions for home. In addition, there will be a concept for small household solutions. There will be all the components. We will collect the maximum number of products to provide the full and best experience for buyers,” Vanoverbeke said.
According to him, the range of items in the Ukrainian store will include products that the company sells in other countries. The company intends to develop retail outlets that will be smaller in size than traditional ones for IKEA.
“The idea to build one big shopping center in one part of the city is no longer working. For example, residents of the left bank area of Kyiv, to get to the store on the right bank, have to spend one or two hours. It is not so convenient. First, this will be downtown, and later, perhaps, we will add a food outlet, and further, probably, we will develop the concept of smaller outlets in less accessible places in the residential areas,” he said.
At the same time, Vanoverbeke said that the company does not rule out the expansion in retail space in Ukraine.
“Our colleagues have analyzed the market of large shopping centers and, indeed, in Ukraine, in comparison with the countries of Western Europe, there is an opportunity to increase the space of IKEA. Our achievements with large shopping centers are more typical for countries like China. But we are still analyzing it for Ukraine. Let’s see how the market will develop,” he said.
Sweden’s IKEA, the largest furniture and household goods retailer in the world, has officially announced the opening of a first store in Ukraine in the city store format in the shopping and entertainment center Ocean Mall in 2019. “The company will open its first store of the new city format in Kyiv in 2019. It will be one of the first IKEA city stores in the world… along with France, the U.K., Denmark, the United States and China. The store in Kyiv will be located in the shopping and entertainment center Ocean Mall,” the press service of the company said.
According to the announcement, the new format of the stores is smaller in size and located in the central part of the city to satisfy the demands of modern consumers who want to make purchases closer to home, as well as online.
“Taking into account the results of the market and consumer preferences study, our team has chosen the most favorable business model, which will enable IKEA to implement plans in Kyiv in the near future. In the new store of the city format, our buyers will get acquainted with the new IKEA approach to creating a comfortable life for as more people as possible,” IKEA Southeast Europe CEO Stefan Vanoverbeke said.
As reported, the report of the Swedish retailer for 2017 says that the company is testing a new city store format, one with a smaller area and closer to the city.
As was announced earlier, IKEA plans to open stores with an area of up to 5,000 square meters in Warsaw’s Blue City shopping and entertainment mall (Poland) and in the center of Paris (France). They will stock a smaller assortment of goods, with emphasis shifted to online commerce services.
In December 2017, IKEA announced plans to open the first facility in Kyiv within two years.
According to the press service, the development of the network in Ukraine will be under the aegis of IKEA Southeast Europe, which is part of the IKEA Group (Ingka Holding B.V.). The company is engaged in retail business IKEA in Croatia, Serbia, Romania and Slovenia. Swedish IKEA is one of the world’s largest retail chains for furniture and household goods. The owners of the IKEA Group are Ingka Holding B.V. and structures under its control.
