Ukraine will save more than $11.4 billion: what does the debt restructuring envisage

Thanks to the debt restructuring, Ukraine will be able to save more than $11 billion on its debt service. This was stated by the Prime Minister of Ukraine Denys Shmyhal, reports UNN.

Details

Shmyhal said that more than 95% of Ukrainian Eurobond holders supported the debt restructuring proposal prepared by the Ministry of Finance in cooperation with the Eurobond Holders Committee.

This decision will save $11.4 billion in debt service over the next three years, which will strengthen our budget and allow us to better fund defense

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Addendum

The Ministry of Finance also noted that the holders of all Ukrainian government Eurobonds and state-guaranteed Eurobonds of Ukravtodor with a total value of USD 20.47 billion voted in favor of the proposed restructuring of Ukraine's Eurobonds and state-guaranteed bonds of Ukravtodor.

This landmark decision is a crucial step in Ukraine's strategy to preserve macroeconomic stability, ensure public debt sustainability and preserve the resources necessary to finance the country's defense in the face of full-scale Russian aggression

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It is noted that the restructuring involves 

• nominal reduction in the value of the public debt by 37% from the first day of the agreement, which reduces the volume of Ukraine's public debt by more than USD 8.5 billion. US DOLLARS, 
• Reduction of debt payments by USD 11.4 billion. USD 11.4 billion over the period of the IMF Program (reduction by over 90%) and by USD 22.75 billion by 2021. by 2033 (a reduction of over 75%),
• increase in the average maturity of Eurobonds by almost 4 years (in addition to the 2-year increase in the maturity in 2022).

The Ministry of Finance explained that the restructuring of Ukraine's external commercial public debt was completed in less than 5 months, despite the inherent difficulties due to the situation in the country and one of the largest number of series and face value of Eurobonds subject to restructuring in recent times.

The deal provides the largest net present value debt relief of approximately 60% for a sovereign issuer since 2012 and marks the first debt instrument with a contingent component approved under the IMF's new methodology for assessing sovereign debt risk and sustainability.

The completion of the Eurobond restructuring deal is an important step towards ensuring Ukraine's fiscal stability, which is necessary to continue financing our defense under martial law. This important step towards restoring long-term economic stability will allow us to return to international markets more quickly once the security situation improves. This agreement will reduce Ukraine's debt to a sustainable level, allow us to meet the objectives of the IMF program and meet the expectations of the Ukraine's Creditors Group

 The agency concludes that after receiving positive results of the voting, which began on August 9 and ended on August 27, the restructuring process is moving to the final stage - the settlement phase.

The transaction is expected to be settled on August 30.

Recall

In July it was reportedthat Ukraine had reached an agreement in principle with some of its private creditors - bondholders - to restructure its international debt of more than $20 billion.