Photo: Ukrainian Government
Ukraine has taken a significant step in restructuring its national debt by reaching a principal agreement with the committee of Eurobond holders. Prime Minister Denys Shmyhal announced this development.
Stages and Terms of Restructuring
The Prime Minister emphasized that this agreement will enable Ukraine to save $11.4 billion on debt servicing over the next three years and $22.75 billion by 2033. “This will allow us to free up resources for essential needs: our defense, social protection, and reconstruction,” Shmyhal stated on his Telegram channel.
According to the London Stock Exchange, the restructuring will affect 13 series of Ukraine’s outstanding Eurobonds, as well as outstanding Eurobonds of Ukravtodor. Details of each series are as follows:
| Instrument | Rate | Maturity Date |
|---|---|---|
| USD 912 million | 7.75% | September 2024 |
| USD 1.355 billion | 7.75% | September 2025 |
| USD 750 million | 8.994% | February 2026 |
| USD 1.34 billion | 7.75% | September 2026 |
| USD 1.33 billion | 7.75% | September 2027 |
| EUR 1 billion | 6.75% | June 2028 |
| USD 1.32 billion | 7.75% | September 2028 |
| USD 1.31 billion | 7.75% | September 2029 |
| USD 1.6 billion | 9.75% | November 2030 |
| USD 1.75 billion | 6.876% | May 2031 |
| EUR 1.25 billion | 4.375% | January 2032 |
| USD 3 billion | 7.375% | September 2034 |
| USD 2.6 billion | 7.253% | March 2035 |
| USD 700 million (Ukravtodor) | 6.25% | 2030 |
Each series will be exchanged for a new package of Series A bonds (40% of the total amount) and Series B bonds (23% of the total amount).
Resumption of Payments and New Terms
Ukraine will resume regular coupon payments for Series A bonds starting August 1, 2024, at a preferential rate of 1.75%. From February 1, 2026, the rate will increase to 4.5% per annum, from August 1, 2027, to 6% per annum, and from February 1, 2028, to 7.75% per annum.
The first principal repayments for the bonds will begin in 2029.
Payments for Series B bonds will resume on August 1, 2027, at 3%, with the rate increasing to 7.75% from February 1, 2034.
Additional Conditions
Additionally, under certain conditions, Ukraine may issue additional Series B bonds in 2029, covering up to 12% of the debt depending on GDP growth rates.
On June 17, it was reported that Ukraine had proposed to creditors to write off between 25% and 60% of Eurobonds. While creditors did not agree, negotiations will continue. Ukraine has until August 1 to finalize this. A moratorium on official external debt payments is already in place until 2027, while the payment pause for Eurobonds ends in August 2024.
This agreement marks a crucial step towards Ukraine’s financial stability and its ability to effectively address current challenges.
Source: liga
