OREANDA-NEWS. May 28, 2010. The government plans to issue VAT-bonds for 20 billion hryvnia for five years at 5.5% APR. This Prime Minister Mykola Azarov said during meeting on development and support of industrial sectors at the regional level.

According to Mykola Azarov, the total State's obligation to refund VAT to enterprises amounts to 20 billion hryvnia.

"We will solve this problem in the near future by issuing bonds. The Treasury will get the generalized credit obligations. This will be the securities in electronic shape, which will be supported by the volume of debt of the State on VAT Refund" - the Prime Minister said.

He said the bonds would be placed by state-owned banks "Oschadbank" and "Ukreximbank": "We expect 20% payout within five years. That means, during this time the securities would be fully redeemed and paid by the State. Rate of return on these securities is 5.5%, discount is possible on sale – about 10 percent".

Head of Government noted that the funds should be used to pay off debts, modernize them, but not for the foreign exchange market: "The issue of 20 billion hryvnia is to be done correctly".