OREANDA-NEWS. June 24, 2010. VAT bonds, government bonds that are used as a form of repayment to exporters for the VAT arrears accumulated by the Government, may be issued in multiple tranches, the Ministry of Finance reported June 23. An exact amount of each installment will be specified once the verification procedure is completed. The preliminary data suggests the amount of the first tranche can be between UAH 1bn and UAH3bn.

Millennium Capital sees this news as positive for investors. Bonds issued in tranches will prolong a short term (by June 25) deadline set for bond applications and enable exporters that have not yet applied to claim VAT bonds. As no other VAT repayment within 2010 is foreseen for exporters facing the shortage of working capital, the supply of VAT bonds will substantially outstrip the demand thus bringing about huge discounts.