On August 9, Ukraine’s Finance Ministry announced the terms for exchanging old bonds for newly issued securities, initiating the restructuring of the country’s external debt on Eurobonds.
In late July, Kyiv reached an agreement in principle with some of its creditors to restructure approximately $23 billion of its external debt.
At the start of Russia’s full-scale invasion, Ukraine negotiated a deal with creditors to postpone payments due to the economic strain of the war. The agreement, which froze payments on around $23 billion, was set to expire on August 1.
According to a statement listed on the London Stock Exchange, holders of Ukraine’s sovereign bonds are eligible to participate in the exchange to receive new securities. Ukraine is inviting holders of each series of sovereign bonds and bonds guaranteed by Ukravtodor, the state agency responsible for roads, to exchange them for new securities.
The restructuring is expected to be completed by August 27. The Finance Ministry noted that creditors who agree to the terms by August 23 will receive additional compensation.
The grace period for one of the government’s Eurobond issues ends on August 10, meaning that failure to make the payment could result in a default.
On July 18, the Ukrainian parliament passed a bill granting the government the authority to suspend payments on external public debt until October 1.
“Once completed, this restructuring will also pave the way for Ukraine’s market re-entry as soon as possible when the security situation stabilizes to fund our country’s swift recovery and reconstruction,” commented Finance Minister Serhii Marchenko.
