Naftogaz Ukrainy and West LB sign new credit agreement

National joint-stock company Naftogaz Ukrainy and the Germany-based West LB AG signed a credit agreement for $45n with a 3.6-percent annual interest rate above LIBOR, the press center of the company reported. Under this agreement, the credit is to be repaid in one year. The current LIBOR preserved, the total interest rate on this credit shall not overcome 4.8 percent per year. This is the lowest interest rate in the history of crediting Ukrainian foreign trade participants by foreign credit institutions. This agreement suggests the use of a pre-export financing pattern. The credit is insured by export contracts of the company and gas volumes pumped into Ukrainian underground storage facilities.

West LB AG allocated $30m in its first credit to the Ukrainian gas company for 12 months early in December 2002. Its repayment was guaranteed by revenues from natural gas exports to Central European countries. The Trade Finance Magazine called the credit agreement between Naftogaz Ukrainy and West LB the deal of the year. Naftogaz Ukrainy has become the first among Ukrainian companies whose borrowing operations received such a high expert estimate. The resources were used for streamlining the gas transportation system and providing the further natural gas supplies. On July 31, 2003, the credit has been paid off in full.

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