KIEV, July 2 - Ukraine will convert the remaining half of its $2 billion debt to VTB into eurobonds, VTB Chairman Andrei Kostin told the press in Kiev.

VTB allocated a six-month bridge loan to Ukraine in June 2010 (ahead of sovereign eurobond placement and receipt of the first tranche of an IMF loan) totaling $2 billion at 6.7% per annum. Later VTB passed Ukrainian loan rights to VTB Capital. Payments were due in June 2012 as the six-month loan was extended three times to a total of 1.5 years. Ukraine signed a deal with VTB Capital in late May 2012, according to which $1 billion and interest on the entire loan was to be paid on June 6, 2012 and the rest on June 4, 2014.

In accordance with the deal, Ukraine issued $1 billion in bonds.

The remaining part of the debt to VTB will be repaid in a similar way.

"This will also be eurobonds, which Ukraine has already issued," Kostin said.