Ukraine agrees on restructuring its external public debt
Ukraine has reached an agreement with a committee of European bondholders on a comprehensive restructuring of its external public commercial debt.
Source: Serhii Marchenko, Minister of Finance of Ukraine
Quote: "After months of negotiations and hard work with private creditors, the IMF and official creditors, we have reached an agreement with the committee of European bondholders on a comprehensive restructuring of our external public debt."
Details: The agreement will provide US$11.4 billion in debt service savings over the next three years, amounting to US$22.75 billion by 2033. Marchenko stressed that this will free up financial resources for defence and social spending.
The completion of this restructuring agreement will create the conditions for Ukraine's early return to the international capital market once the security situation stabilises to finance the country's rapid recovery and reconstruction.
Background:
- The Verkhovna Rada has passed a bill allowing the government to suspend payments on external public debt until 1 October 2024.
- Some holders of Ukraine's GDP-linked warrants have started to reach out to each other to form a group to represent their interests in the sovereign debt restructuring.
- Even if Ukraine fails to restructure its debt by August, a moratorium on repayments rather than default is the most likely to be agreed upon with creditors.
- Ukraine has one month to agree with its creditors on debt restructuring and avoid a default.
- Ukraine has told investors that it still hopes to restructure its wartime debt before the moratorium on repayments ends on 1 August.
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