Ukraine: Daily Briefing – October 26, 2018, 5 PM Kyiv time

Ukraine’s Ministry of Defense reported at 12:30 PM Kyiv time that in the last 24 hours, no Ukrainian soldiers were killed and one Ukrainian soldier was wounded in action. In the last 24 hours, Russian-terrorist forces opened fire on Ukrainian positions on the Luhansk and Donetsk sectors of the front 17 times in total, including at least 4 times with heavy weapons. Returning fire, Ukrainian forces killed 1 and wounded 5 enemy combatants.

Radio Free Europe/Radio Liberty (RFE/RL) reported, “The European Parliament has urged EU states to make clear to Russia that it will face tougher measures if it intensifies its ‘de facto blockade’ of international shipping in the Sea of Azov.

A nonbinding resolution passed on October 25 called on EU member states to warn Moscow ‘that the targeted sanctions against Russia will be reinforced’ if it further escalates actions it labeled as a ‘violation of Ukraine’s sovereignty.’

The parliament ‘deplores excessive actions of the Russian Federation in the Sea of Azov as far as they breach the international maritime law and Russia’s own international commitments,’ the resolution said. […]

The dispute stems from Moscow’s construction of a 19-kilometer bridge over the Kerch Strait from Russia’s Krasnodar Krai to Crimea’s eastern end in 2016 […]

The United States and the EU assailed the construction of the bridge, accusing Russia of impeding international shipping in the Sea of Azov by limiting the size of ships that can transit the Kerch Strait. The strait is the only path to reach Ukraine’s territorial waters in the Sea of Azov from the Black Sea. […]

The parliament said it was instructing its president to forward the resolution to the EU member states, the European Council, the European Commission, the Organization for Security and Cooperation in Europe (OSCE), NATO, the Ukrainian government and parliament, and the president, parliament, and government of Russia.”

The text of the European Parliament’s resolution is available here

Ukraine’s President Petro Poroshenko stated, “I welcome the approval of an important resolution of the European Parliament on the situation in the Sea of Azov. The Russian aggressor must understand that all its actions breaking the international law and bilateral agreements will continue to receive a decisive and adequate response from the democratic community. […] The European Union, together with Ukraine, will counteract the ‘crawling annexation’ of the Sea of Azov by Russia and violation of the freedom of navigation.”

Ukraine Business News reported, “Ukraine has raised $2 billion in Eurobonds — $750 million for five years, and $1.25 billion for 10 years. The offering was oversubscribed, with bids totaling $4.9 billion. This demand pushed rates down about one quarter point from initial listing references. The final annual interest rate on 5-year bonds was 9%. On the 10-year bonds it was 9.75%. Of the new placement, $725 million will be used to redeem a bond that matures in February. This is the first long-dated dollar debt since Ukraine raised $3 billion one year ago. […]

            The government has authorized Naftogaz to raise $1billion for up to five years via Eurobonds. Co-organizers of the issue will be Citigroup Global Markets and Deutsche Bank AG. The issue will be listed on the Irish Stock Exchange.

            Separately, another state company, Ukrzaliznytsia, or Ukrainian Railway, says it plans to raise money through a Eurobond issuance before the end of this year.

             Dragon Capital writes on what Naftogaz might do with the bond money: ‘Naftogaz’s aggressive development program, including investments in gas production, oil processing and retailing, which it may find constrained to finance in case the government decides to extract hefty dividends to help it fund utility subsidies in 2018-2019. Another focus area encompasses energy saving projects intended to cut gas consumption among low-income households and reduce gas bills.'”

German Chancellor Angela Merkel will travel to Ukraine on November 1. She will meet with Ukraine’s President Petro Poroshenko, Prime Minister Volodymyr Groysman, and the chairs of Parliamentary groups, the Chancellor’s press service reported.