US signs $1 bln loan guarantee for Ukraine

The United States signed on May 18 its second $1 billion loan guarantee deal for Ukraine aimed at helping the crisis-wracked country surmount a Russia-backed insurgency and rebuild its tattered economy.

The U.S. loan guarantee agreement is part of a $7.5 billion package of support for Ukraine over the coming year from its bilateral and multilateral partners, the Ukrainian finance ministry said.

"On behalf of my government and the people of Ukraine, I want to offer our sincere thanks to the United States for their continued and unwavering support. This loan guarantee is a cornerstone of that support and comes at a critical time for our country," said Finance Minister Natalie Jaresko in a statement.

With the U.S. guarantee, market participants will view the risk of Ukrainian Eurobonds at the high credit rating of U.S. sovereign debt.

U.S. Treasury Secretary Jacob Lew said that the $1 billion loan guarantee underscores Washington's continued support for the economic reform agenda of the Ukrainian government of President Petro Poroshenko.

"Since we signed our first loan guarantee agreement one year ago, Ukraine has worked closely with the IMF, the World Bank, the United States, and other members of the international community to implement a robust reform program that will help stabilize Ukraine's economy and lay the groundwork for future growth and prosperity," Lew said in a statement.

"Ukraine has taken critical reforms already, and its commitment to making a decisive break with the corruption and stagnation of the past is clear. This progress must continue so that the people of Ukraine can realize the prosperity and stability they deserve."   

The loan announcement came as Ukraine is in difficult...