Ukraine has reached an agreement in principle with the Committee of Eurobond Owners of Ukraine, which is important in the process of restructuring the external debt — it will save more than $30 billion.
This was reported by Prime Minister Denys Shmyhal and Minister of Finance Serhii Marchenko.
Ukraine will be able to save $11.4 billion on external public debt service over the next three years and another $22.75 billion by 2033.
According to the Prime Minister and the Minister of Finance, this will allow to support the macro-financial stability of Ukraine and to finance the needs of defense, social protection and recovery.
Thanks to the agreement in principle with the Special Committee of Creditors (it represents the interests of Eurobond owners) on restructuring, Ukraine simultaneously fulfills its obligations within the framework of cooperation with the International Monetary Fund (IMF) and avoids default. In March 2023, Ukraineʼs public debt was recognized as unsustainable, so Kyiv undertook to restore its sustainability by restructuring external commercial debt and official bilateral debt. If not for the deal, there would be a possibility that Ukraine could declare default after the end of the debt holiday in August.
The deadline for coupon payments for one of the issues of government Eurobonds maturing in 2026 was August 10. In the event that Ukraine fails to reach an official agreement on restructuring, the government would use draft law No. 11396, which allows the Cabinet of Ministers to suspend payments on external public debt during debt restructuring until October 1, 2024.
- In August 2022, the owners of Eurobonds agreed to a two-year postponement of payments and their repayment terms. Ukraine has reached such an agreement regarding almost 75% of the total principal amount of securities in circulation. Most of Ukraineʼs creditors have suspended payment obligations until 2027.
- In October 2023, Reuters reported that Ukraine was discussing with foreign bondholders plans to restructure $20 billion in debt and the possibility of raising new financing.
- In May 2024, The Wall Street Journal wrote that foreign creditors of Ukraine want to resume payments on the national debt as early as 2025.