Ukraine has completed the restructuring of $20.5 billion worth of government bonds and government-guaranteed Eurobonds, reducing its debt by about $9 billion, which will save $11.4 billion over the next three years and $22.8 billion by 2033, the Finance Ministry said on Wednesday, UNN reports.
Details
"Ukraine announced the successful completion of the debt restructuring operation and settlement of thirteen series of government Eurobonds and government-guaranteed Eurobonds issued by Ukravtodor," the Finance Ministry said.
"This transaction was carried out to restore debt sustainability, maintain macro-financial stability and increase state budget resources in the context of the ongoing Russian military aggression against Ukraine," the statement said.
The restructuring process, as noted, "included the exchange of thirteen series of government Eurobonds and one series of state-guaranteed Eurobonds of Ukravtodor in the amount of approximately USD 20.5 billion (approximately USD 24 billion including capitalized interest) for eight new series of Eurobonds with a nominal value of USD 15.2 billion".
"As a result of this agreement, Ukraine's public and publicly guaranteed debt has been reduced by about USD 9 billion. This means a nominal reduction of 37% from the first day of the deal and a reduction of about 60% in the net present value of the debt (at a discount rate of 14%). This is one of the largest debt write-offs in recent sovereign debt restructurings," the Ministry of Finance said.
Debt payments are reportedly being reduced by 93%, which "will result in savings of USD 11.4 billion over the next three years." In addition, debt service and repayment costs will be reduced by 77% by 2033, which "will save a total of USD 22.8 billion," the ministry added.
I am grateful to our investors and official sector partners for their continued support throughout the debt restructuring process. The successful outcome is a testament to constructive cooperation and shared commitment to Ukraine's long-term macro-financial stability. Despite the ongoing challenges posed by the Russian aggression, we have taken a decisive step to ensure Ukraine's financial stability. Thus, critical resources will be directed to where they are needed most, namely security and defense. Strengthening the confidence of our creditors and the international financial community remains our priority, even as we face unprecedented challenges
"This agreement is in line with the goals of the IMF debt sustainability program and was approved by the Group of Ukraine's creditors," the Ministry of Finance said.
The restructuring, as noted, was carried out in cooperation with White & Case as legal advisors and Rothschild & Co as financial advisors to the Ministry of Finance of Ukraine.