Canada completes issuance of $500 million Ukraine Sovereignty Bond
November 30, 2022 - Ottawa, Ontario - Department of Finance Canada
Yesterday, the Government of Canada successfully completed the issuance of a five-year $500 million Ukraine Sovereignty Bond, first announced last month by the Prime Minister. The funds will assist the Government of Ukraine so it can continue to provide essential services to Ukrainians this winter, such as pensions, the purchasing of fuel, and restoring energy infrastructure.
The investor base for the Ukraine Sovereignty Bond is primarily Canadian, with nearly $50 million in demand from individual Canadians. Overall it includes a broad range of domestic and international institutional investors, different orders of government, and international official sector institutions like central banks.
The Ukraine Sovereignty Bond has provided Canadians with an opportunity to show their support to Ukraine by purchasing the bond, which is fully backed by Canada’s AAA credit rating, in denominations starting at $100. Those still wishing to purchase the bond should contact a participating financial institution.
Following negotiations with Ukraine, an amount equal to the proceeds from the bond will be transferred to Ukraine in the form of a loan through the International Monetary Fund (IMF) Administered Account for Ukraine.
The issuance received strong demand from investors in Canada and abroad, with a total book order of $500 million, and resulted in a semi-annual interest payment of 3.245 per cent. The bond will mature on August 24, 2027 – Ukrainian Independence Day – at which time bondholders will receive the full repayment of their initial investment.
The Ukraine Sovereignty Bond is in addition to the Government of Canada's $2 billion in direct financial assistance to Ukraine so far in 2022, all of which has already been disbursed. Canada’s financial assistance including this bond issuance total $2.5 billion.
Canada has separately committed more than $2.5 billion in military, humanitarian, and other assistance to Ukraine this year. This brings Canada's total commitments to Ukraine to more than $5 billion.
Canada played a leading role in the creation of the IMF’s multi-donor Administered Account for Ukraine, which assists Ukraine in meeting its balance of payments and budgetary needs, and in stabilizing the Ukrainian economy. To date, Canada has disbursed $1.45 billion to Ukraine through the IMF Administered Account.
Subject to negotiations with Ukraine, this additional loan will respect the spirit of the current debt service suspension agreement agreed by the Group of Creditors of Ukraine. This will have no impact on interest payments to bondholders, who will receive interest coupon payments on a semi-annual basis.
Consistent with the terms of Canada’s financial assistance to Ukraine to date, the funds provided to Ukraine cannot be used for lethal activities or purchases, and must be consistent with relevant sanctions laws and regulations.
Canada is providing additional support to Ukraine through its shareholdings in international financial institutions, including the IMF, the World Bank, and the European Bank for Reconstruction and Development. Since the onset of Russia’s illegal invasion, these three institutions have together committed more than $28.5 billion to support the people of Ukraine.
- Ukraine Sovereignty Bond now available for Canadians to purchase
- Prime Minister announces new measures to support Ukraine
- Canada Provides Additional Financial Support to Ukraine
- Canada pledges additional support for Ukraine
- Canada’s engagement in Ukraine
- Canada’s response to the Russian invasion of Ukraine
- Canadian military support to Ukraine
- Statement of the Group of Creditors of Ukraine
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Department of Finance Canada
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