* Ukraine seeks foreign debt to cover T-bill payments
* Analysts say loan would be difficult and expensive
* But domestic debt should be rolled over with few problems
(Adds analysts, details)
By Natalya Zinets and Sabina Zawadzki
KIEV, Feb 15 (Reuters) - Ukraine wants to borrow abroad to pay a big domestic debt bill due in April, a deputy finance minister said on Monday, highlighting Kiev's financial bind as a post-election political order takes time to take shape.
Ukraine sidestepped default in the past year, finding increasingly creative methods to pay for its debts with the help of the central bank and state-owned banks, especially after the International Monetary Fund suspended its bailout programme.
Deputy Finance Minister Andriy Kravets said Ukraine will issue debt abroad but some analysts said the chances of getting a good deal were slim, while at the same time they considered domestic debt repayment to be manageable.
"We don't have a large amount of foreign debt this year, its servicing and payment is not large," Kravets told reporters. "We have a more difficult and tense situation with domestic debt."
"Naturally we are going to fulfil our obligations, and so for that we are going to try to diversify our sources (of financing), possibly to look for resources on external markets ... we have already begun this work."
Kravets indicated he was talking about a bilateral deal of a private placement. He said Kiev could not issue a Eurobond before the 2010 budget is passed, the state railway finishes restructuring its debt and the IMF restarts its programme.
All of this is unlikely to happen before April -- a presidential election earlier this month has yet to produce a stable government capable of undertaking such negotiations, leaving to the finance ministry only debt that is not public.
A former prime minister and opposition leader, Viktor Yanukovich, is now president elect but his victory has not been recognised by his election rival, Prime Minister Yulia Tymoshenko, heralding a period of continued instability.
COMING HOME TO ROOST
Ukraine has just one Eurobond due this year -- a 35.1 billion yen ($390 million) bond to be repaid in December.
But as foreign markets were closed to Kiev last year and problems grew with the International Monetary Fund's $16.4 billion bailout, the finance ministry began issuing more and more short-term debt with sky-high yields.
These treasury bills are coming home to roost now.
The government has repaid 1.7 billion hryvnias ($214 million) worth of T-bills due in February. The March payment is smaller at 785 million hryvnias (under $100 million), but it will owe 3.7 billion hryvnias ($463 million) in April.
"There could be some difficulties but I am quite certain they will repay it. They'll find a way to do that via the central bank and state-owned banks," said Dmitry Gourov, economist at UniCredit.
Kiev has previously managed to refinance debt, as well as bailing out the ailing state energy firm Naftogaz, by demanding that the central bank and state-owned bank buy T-bills.
"I think it will be possible to roll over that debt," said Oliver Weeks, an economist with Morgan Stanley in London. "They borrowed over a billion hryvnias in each of the T-bill auctions in the last few weeks."
But some, including the finance ministry itself, worry that the refinancing would entail ever higher yields to attract buyers. Yields peaked at about 27-28 percent last October and the ministry has sold bills recently at 18.5-23 percent.
"They could approach either a hedge or financial institution for a loan but that would be very expensive. The rates would not be public but it won't set a good precedent," Weeks said.
"Or they can approach a friendly government, so they might be talking with Russia."
It is not the first time that Russia has been touted as possible lender to Ukraine. Media reports throughout last year have suggested that Tymoshenko sought a loan from Moscow, however neither side denied or confirmed these intentions.
With incumbent President Viktor Yushchenko on his way out, however, relations with Russia are set to improve and financial help from Moscow may be more likely.
Separately, the State Statistics Committee said on Monday Ukrain's economy shrank 7 percent in the fourth quarter last year against the same quarter a year ago.
The committee gave no comparative figure and did not yet provide details for the full year. Analysts have said they expected the economy to have shrunk by up to 15 percent in 2009.
(Editing by Ron Askew)