Group of creditors of Ukraine ready to grant deferral of payments, says Ukrainian financier
Following a meeting with representatives of the International Monetary Fund (IMF) and the World Bank, the Group of creditors of Ukraine (GCU) has provided financing assurances for the envisaged IMF Extended Fund Facility (EFF) for Ukraine.
Vladyslav Rashkovan, an Alternative Executive Director at the International Monetary Fund, reported the provision of the assurances in a post on Facebook on March 24.
“Once the situation in Ukraine is stabilized (but by the end of the IMF program), the GCU vows to once again discuss the issue of restoring Ukraine’s debt sustainability.”
The GCU said in a statement that it will grant a debt treatment consistent with the parameters of the IMF program — provided that private external creditors deliver a debt treatment at least as favorable.
After assessing several alternative scenarios for implementing the necessary debt treatment, Ukraine is committed to undertaking a debt treatment of Ukraine’s public external debt, Ukrainian authorities said in a statement on March 24.
“Goal: (i) to restore Ukraine’s debt sustainability; (ii) to preserve liquidity and reduce Ukraine’s financing gap during the program period,” Rashkkovan said.
“The Ukrainian authorities will assess a number of alternative scenarios for implementing the necessary debt treatment in order to maximize the efficiency and success of the process, being mindful of the objective to restore Ukraine’s market access as early as practicable,” Ukraine’s Ministry of Finance said in the statement.
“The Ukrainian government has retained financial and legal advisors to support this process.”
The Ukrainian authorities expect to begin discussions with commercial creditors in early 2024.
IMF officials reached staff-level agreement on March 21 with Ukrainian authorities on a four-year IMF-supported program, with access requested of SDR 11.6 billion (about US$15.6 billion).
National Bank of Ukraine governor, Andriy Pyshny, said he expects final approval on the deal by the IMF Board of Directors in the coming weeks.
On July 20, 2022, the GCU, which includes Canada, France, Germany, Japan, the United Kingdom, and the United States, announced the suspension of service on Ukraine’s national debt by late 2023 and called on holders of Ukrainian Eurobonds to accept the country’s proposal for a two-year postponement of payments for commercial debt.
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