Medium Term State Debt Strategy for 2018 – 2020

1. August 2018 1
Medium Term State Debt Strategy
for 2018 – 2020
August 2018

2. August 2018 2
8.7 9.8 10.6
11.2
17.0
22.8 24.5 26.1 27.9 30.8
34.4 36.0 38.5 37.5
3.8 3.3 3.5
5.8
11.4
17.8
20.2
23.8
32.1 29.2 21.2
24.7
26.8 28.6
12.5 13.1 14.1
17.0
28.4
40.6
44.7
49.9
60.1 60.1
55.6
60.7
65.3 66.1
14.3% 12.1% 9.9%
13.8%
24.9% 30.0%
27.5% 28.4%
32.8%
59.7%
67.1%
69.2%
61.5%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Jun-18
State external debt State domestic debt State debt as % of GDP, %
Ukraine’s State Debt Overview (1/6)
Ukraine’s total state debt, USD bn
 Ukraine’s state debt (as of 30.06.2018):
USD 66.1bn
● State domestic debt: 43%
● State external debt: 57%

3. August 2018 3
Ukraine’s State Debt Overview (2/6)
Note 1 Total public debt includes state and state-guaranteed debt
Note 2 as of end of 2017
Ukraine’s total public debt as % of GDP vs. peer countries1,2, %
71.8%
61.5% 61.0%
92.7%
40.0%
Ukraine
(Total public debt)
Ukraine (State debt) Regional peers Rating peers Peers - Regional
leaders
49%
Avg. debt level in
emerging countries
 State debt as % of GDP decreased to 61.5% as of end of 2017

4. August 2018 4
43.3%
48.5%
44.7%
65.8%
56.7%
51.5%
55.3%
34.2%
Ukraine Regional peers Rating peers Peers - Regional leaders
State domestic debt State external debt
Ukraine’s State Debt Overview (3/6)
Note Figures for Ukraine provided as of 30.06.2018, for peer countries – as of end of 2017
Ukraine’s state debt structure vs. peer countries, %
 Ukraine State debt structure displays a slightly higher share of external debt compared
to peer countries
● Hence, Ukraine is more vulnerable to external shocks

5. August 2018 5
IFIs
Eurobonds
Other
external debt
Domestic in
UAH
Domestic in
FX
23%
31%
36%
7%
3%
Ukraine’s State Debt Overview (4/6)
 Concessional funding within Ukraine’s State debt structure accounts for 26% which
demonstrates strong support to Ukraine by international partners
UAH bn USD bn
% of
total
Market financing 1,285.6 49.1 74%
Concessional financing 446.5 17.0 26%
IMF 154.5 5.9 9%
IBRD (World Bank) 127.3 4.9 7%
EU (MFA) 85.9 3.3 5%
EBRD 15,7 0.6 1%
EIB 17.3 0.7 1%
Bilateral loans 45.8 1.8 3%
Total state debt 1,732.1 66.1 100%
Ukraine’s state debt by funding sourcesUkraine’s state debt structure, %
USD
66.1bn

6. August 2018 6
73% 81%
71%
86%
27% 19%
29%
14%
Ukraine Regional
peers
Rating peers Peers -
Regional
leaders
Fixed rate Variable rate
Ukraine’s State Debt Overview (5/6)
 Significant share of state debt is denominated in foreign currencies (particularly, in USD)
which demonstrates that Ukraine is exposed to FX shocks
 Debt instruments with fixed interest rates account for 73% of total state debt which is
in line with peer countries
● Relatively low share of debt instruments with variable interest rates allows Ukraine to
contain interest rate risk
State debt split by interest rate type %State debt split by currency, %
USD
45%
UAH
36%
XDR
9%
EUR
8%
JPY
1%
CAD
0.5%

7. August 2018 7
 Total state domestic debt matures on average in 10.3 years, while external debt average
time to maturity stands at 6.2 years
29.8% 25.5% 27.3%
4.5% 10.9% 8.2%
16.4%
28.4% 23.2%
49.3%
35.2% 41.3%
State domestic
debt
State external
debt
Total
state debt
<3 y 3-5 y 5-10 y >10 y
10.3
6.2
8.1
State
domestic debt
State
external debt
Total
state debt
Ukraine’s State Debt Overview (6/6)
State debt split by maturity, %Weighted average time to maturity (years)

8. August 2018 8
Key Objectives for State Debt Management
Smooth debt
repayment profile
with extended
average maturity
1
Attraction of long
term concessional
funding
Increase of share
of UAH-
denominated debt
Development of
systematic
investor relations
2 3 4
Decline of state debt as % of GDP to:
60.0% 52.2% 49.0%
2018 2019 2020

9. August 2018 9
Major Risk Factors
Refinancing risk
1
Liquidity risk
2
FX risk
3
Interest rate risk
4
►Development of domestic bond market
►Active Liability management operations
►Continued cooperation with the IMF
►Financial support by other IFIs
►Increase of share of UAH-denominated domestic debt
►Introduction of FX hedging instruments
►Keep a limited share of external debt with variable interest rate
Mitigating factors
Contingent
liabilities risk
►Prudent state banks management policy
►Gradual decrease of State's ownership in Ukraine’s banking sector
5

10. August 2018 10
Strategy for a medium term
Roadmap for Strategy Implementation
Domestic market development
Issuances of sovereign bonds in USD, EUR and UAH on
international capital markets
Widening of investor base and facilitation of investor access
Liability management operations, incl. buy-back of 2019-2021
Eurobond series
Deepening of investor relations
Maximization of concessional funding through cooperation with
IFIs and foreign governments
Government's efforts to improve Ukraine’s credit ratings

11. August 2018 11
38.5 41.5 42.7 42.5
26.8 24.9
27.3
29.8
65.3 66.4 70.1
72.2
61.5% 60.0%
52.2%
49.0%
2017 2018 2019 2020
State external debt State domestic debt State debt as % of GDP, %
Strategy KPI Targets
Ukraine’s State debt forecast , USD bn
 According to the Strategy, state debt is expected to amount to 49.0% of GDP by 2020
 The Strategy is based on The Forecast of Economic and Social Development of Ukraine for 2018-2020
and for 2019-2021 approved by the Cabinet of Ministers of Ukraine as well as on subsequent decrease in
state budget deficit (from 2.4% of GDP in 2018 to 2.0% of GDP in 2020)