Pension funds invest UAH 60 mln in Nova Poshta bonds

Nova Poshta, part of the Nova group and Ukraine's leading logistics operator, reports significant investor interest in its bonds from insurance companies, pension funds, investment funds, and banks, enabling successful bond placements.

"Pension funds have invested about UAH 60 million with us. While some may think the pension fund market in Ukraine is underdeveloped, we see that it is indeed active," said NOVA CFO Petro Fokov at the Ukrainian CFO Forum in Kyiv, held on October 24-25.

Currently, Nova Poshta conducts private bond placements among pre-designated institutional investors, but bonds can be purchased on the secondary market by individual investors.

"We have individual investors (bondholders), but not as many compared to banks, insurers, and pension funds," Fokov said.

The NOVA group's CFO emphasized that Nova Poshta is a prominent issuer of hryvnia-denominated bonds in Ukraine and, in January 2023, was the first issuer to resume bond issuance after the full-scale Russian invasion began. Fokov highlighted the advantages of hryvnia bonds for issuers, including the lack of collateral requirements.

"They're more expensive and require a bit more transparency, with some additional disclosures on the website, but they offer their own benefits," Fokov added.

Nova group, which also issues bonds through NovaPay Credit, sees maintaining an attractive bond market as a responsibility, ensuring that bonds remain stable and reliable investments. "We want people to trust corporate bonds, not only government bonds," he said.

The group's investment this year will double compared to 2021, reaching UAH 8.5 billion. For debt financing, Nova relies on loans from international financial institutions and banks, including a UAH 3 billion loan in hryvnias from the European Bank for Reconstruction and Development (EBRD).

"We take loans in hryvnias from the EBRD, as we are a hryvnia-based company and don't want unnecessary risks. We calculate everything carefully to ensure repayment capacity," Fokov said.

NOVA also collaborates with ten leading Ukrainian banks, following a strategy of complete covenant standardization, modeled on the EBRD's comprehensive financial covenant framework.