The National Bank of Ukraine (the "NBU") will no longer require that Ukrainian banks obtain individual licences to invest abroad in securities issued by certain foreign states and IFIs. Generally, under Ukrainian currency control rules, any outbound investment from Ukraine has been prohibited unless based on an NBU individual licence. The relevant amendments became effective on 23 November 2016.

An investment will not be subject to the licensing requirement if it meets all of the following conditions:

·  the bank holds a general currency licence (not to be confused with individual licences) and is allowed to engage in foreign currency transactions in foreign capital markets;

·  the issuer is an international financial institution or a G7 member and rated at least "АА-"/"Аа3" by at least two of Fitch, Standard & Poor's or Moody's;

·  permitted instruments are debt securities denominated in the currency of a G7 member, with the date of repayment within five years from the date of their purchase by the bank;

·  the bank may only purchase or sell such securities from/to non-Ukrainian entities abroad.

The new exemption from the individual licensing regime appears to apply only to banks trading for their own account, ie their clients will still require NBU individual licences to invest abroad even if such deals are brokered by a bank.

Raising ECA-supported Loans
aising ECA-supported Loans

Another amendment relates to export credit agency (ECA) covered financings to Ukrainian borrowers. NBU regulations currently provide that the aggregate amount of payments under a loan transaction, including interest and fees, cannot exceed the maximum interest rate (MIR) set by the NBU. The MIR is presently set at 9.8 - 11 per cent per annum depending on maturity for fixed interest rate loans and 3-month USD LIBOR plus 750 bps for floating interest rate loans.