Ukraine completes $20.5 billion debt restructuring

Ukraine has announced the completion of a debt restructuring deal. This will save a total of $22.8 billion by 2033.

This is reported by RBC-Ukraine with reference to the press service of the Ministry of Finance.

According to the press service, the process included the exchange of government Eurobonds and Ukravtodor bonds worth $20.5 billion (approximately $24 billion, including capitalized interest) for bonds with a par value of $15.2 billion.

“As a result of this transaction, Ukraine's public and publicly guaranteed debt has been reduced by about $9 billion. This means a nominal reduction in the cost of debt by 37% from the first day of the agreement and a reduction in the net present value of debt by about 60% (at a discount rate of 14%),” the statement said.

Debt payments are reduced by 93%, resulting in savings of $11.4 billion over the next three years. In addition, debt service costs will decrease by 77% by 2033, which will save a total of $22.8 billion, the press service explained.

“Despite the ongoing challenges posed by Russian aggression, we have taken a decisive step to ensure Ukraine's financial stability. Thus, critical resources will be directed to where they are needed most, namely security and defense,” commented Yuriy Butsa, government commissioner for public debt management.

According to the Ministry of Finance, this agreement is in line with the objectives of the IMF program on debt sustainability and was approved by the Group of Ukraine's creditors.

The restructuring was carried out in cooperation with White & Case as legal advisors and Rothschild & Co as financial advisors to the Ministry of Finance of Ukraine.

Author - Olena Madiak, 04/09/2024