Debt Restructuring: Ukraine says its GDP warrant exchange plan is the best
Kyiv • UNN
Ukraine has pushed back against hedge funds' demands regarding debt restructuring, stating that its proposal to exchange $3.2 billion in GDP warrants is the best possible solution. The Ministry of Finance of Ukraine is confident in its proposal, which is intended to restore the sustainability of public debt.
Amid an escalating debt restructuring dispute, Ukraine has strongly rejected the demands of major hedge funds, stating that its proposal to exchange $3.2 billion in GDP warrants for a new class of bonds is the best "possible solution" for the warring country. This is reported by Bloomberg, writes UNN.
Details
Ukraine's Ministry of Finance stated that it remains confident in its proposal, launched on Monday, as the best way to fulfill a long-standing commitment and restore public debt sustainability.
Reason for the dispute
GDP warrants are complex securities whose payments depend on the pace of Ukraine's post-war economic recovery. Although they were excluded from the $20 billion debt restructuring last year, Kyiv is now seeking to resolve this issue.
A group of warrant holders, which includes hedge funds Aurelius Capital Management and VR Capital Group, is demanding more favorable exchange terms. In particular, investors insist on protection against potential further restructuring.
The ad hoc committee of warrant holders stated that no consensus had been reached and urged investors to "await further communication" before agreeing to Ukraine's terms.
The market experienced fluctuations: sovereign dollar bonds fell, and the price of GDP warrants rose above par value – the highest level since 2021.