The maturity date of the Eurobonds will be extended – the first of them in the amount of $1.172 billion will occur in 2029.
Ukraine has reached agreements in principle with creditors on restructuring $23.4 billion of external debt, after which it will extend the maturity of Eurobonds. The Ministry of Finance announced this on Monday, July 22.
“The restructuring agreement will provide that the existing Eurobonds outstanding will be exchanged for a package of new Eurobonds with a nominal reduction in the debt value of 37% initially and a reduction in the net present value of the debt by about 60%,” the statement said.
Once the restructuring is completed, the maturity of the Eurobonds will be extended: the first payment in the amount of $1.172 billion will take place in 2029. For comparison, without the restructuring, the principal amount of the debt would be $9.381 billion. US (excluding capitalized interest) will be repaid between 2024 and 2029.
In addition, according to the agreements reached, new Eurobonds will be issued: four series of Bonds A with maturities in 2029, 2034, 2035 and 2036 and four series of Bonds B with maturities in 2030 , 2034, 2035 and 2036.
Note The coupon payments: 1.75% in 2024-2025, 4.5% in 2026 – first half of 2027, 6% in the second half of 2027-2033 and 7.75% from 2034 onwards.
Note B coupons: no coupons until the second half of 2027, then 3% from the second half of 2027 to 2033 and rising to 7.75% from 2034 onwards.
The Ministry of Finance assured that the agreements reached are supported by the Committee of Creditors of Ukraine and correspond to the target indicators of the IMF Extended Financing Facility program, namely: (1) the debt-to-GDP ratio will be 82% by the end of 2028, (2) the debt-to-GDP ratio will be 65% until the end of 2033, (3) the average financing requirement will be at the level of 8% of GDP in 2028 – 2033 .
“Currently, Ukraine intends to complete the restructuring agreement as soon as possible, subject to the readiness of the documentation,” the Ministry of Finance added.
Earlier on Monday it became known that Ukraine has agreed to payments on its external debt. This important step in the debt restructuring process will save $11.4 billion in debt service costs over the next three years.
In June it was reported that Ukraine’s negotiations with private creditors to restructure more than $20 billion in debt had failed. If a compromise is not reached, then Ukraine could default in August. On July 18, the Verkhovna Rada approved the suspension of external debt payments.
Demand for debt restructuring intensified after international rating agency S&P Global Ratings downgraded Ukraine’s credit rating.
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Source: korrespondent
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