Debt instruments for raising funds for recovery of Ukraine's infrastructure in conditions of limited sources of financing

The subject of the study is the theoretical principles of determining the directions of raising funds for Ukraine’s infrastructure in the long term, with account of their volumes, types, terms and relevant risks.The purpose of the study is to substantiate the need for issues of debt instruments for financing infrastructure, assess the available medium– and long–term liquidity, potential investment volumes, as well as the mechanism for state participation through appropriate intermediaries, and ways of minimizing risks.Research methods. The study is based on an interdisciplinary approach: theoretical analysis of scientific works, comparative analysis of practices of debt securities’ placement in different countries and synthesis of information from open sources. Review and empirical materials were used, a systematic approach was applied to identify the potential for investing in infrastructure securities.Results of the work. The article examines the trends in the concentration of liquidity in the financial market in government debt securities. Formation path of Ukrainian debt market has analyzed and problems that hinder the development of corporate bonds are identified. Ways for developing mechanisms for financing infrastructure with debt securities are outlined. Origination and underwriting of infrastructure bonds’ issues by a specially created state infrastructure fund are proposed and the possibilities of ensuring cash receipts from the placement of these financial instruments are outlined. Minimization of currency exchange rate risks is proposed.Conclusions. Analysis showed that the current record volumes of government bonds in Ukrainian banks’ portfolio indicate a significant amount of liquidity in the banking sector, which could be involved in projects to restore the transport, gas distribution, energy, construction and telecommunications infrastructure that was destroyed as a result of military actions, as well as the expansion of the existing one. Infrastructure long–term debt instruments can become an effective channel for transforming existing liquidity into long–term investments and, accordingly, a factor of economic growth.Development of measures for the selection of infrastructure projects, as well as the provision of appropriate guarantees, their structuring with an emphasis on minimizing liquidity risks, credit risk insurance, and minimizing currency risks is a priority task to ensure high demand for these instruments from major financial market participants. The swaps of a certain level of government bonds in the portfolio of banks and other financial market participants for infrastructure bonds, with appropriate state guarantees, is expected to contribute to the activation of investment processes. Guarantees of solvency and timely cash flows for bonds should include payments and fees from their commencement. A specially created state infrastructure fund could become the organizer of bond issues and take the responsibility of orogination and structuring of issues, guarantee the commencement of projects and proper control over their implementation, underwriting and minimizing risks. Prospects for further research are as follows: ways of structuring and securitization of bond issues; modeling the effects of new issues on consumer inflation, fixed capital investments, export potential; risk assessment and rating of infrastructure debt securities; legislative and organizational principles of the state infrastructure fund.