Ukraine restructures sovereign Eurobond debt
The holders of Ukrainian Eurobonds have agreed to a debt restructuring plan, Ukraine’s Finance Ministry announced on Aug. 28.
According to the ministry, 97.38% of bond holders supported the agreement. The restructuring of Ukraine’s sovereign debt is crucial for maintaining Ukraine’s macroeconomic stability, ensuring the sustainability of public finances as the country needs to fund its military during the ongoing war.
The agreement includes the following measures:
- A nominal reduction of the public debt by 37% from the first day of the agreement, cutting the Ukrainian public debt by over $8.5 billion;
- A reduction in debt payments by $11.4 billion during the IMF Program period (a cut of over 90%) and by $22.75 billion by 2033 (a cut of more than 75%);
- An extension of the average maturity of Eurobonds by nearly four years.
The ministry explained that the restructuring agreement allows for approximately 60% of the public debt to be written off. Prime Minister Denys Shmyhal noted that the decision will save the government $11.4 billion in debt servicing costs over the next three years.
On Aug. 27, the Cabinet suspended debt payments starting Sept. 1, 2024, after the debt restructuring plan was agreed in principle.
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