Will save the state billions of dollars in the post-war period: Ukraine announced a successful restructuring of GDP warrants
Kyiv • UNN
Ukraine announced a successful restructuring of GDP warrants worth $2.6 billion, which will avoid significant payments in the post-war period. This transaction will strengthen debt sustainability and increase the country's budget predictability.
Ukraine has announced a successful restructuring of its GDP warrants, which will save the state billions of dollars in the post-war period. This was stated in a message from the Ministry of Finance, reported by UNN.
Today, December 18, 2025, Ukraine announced that holders of state derivatives linked to GDP ("GDP warrants"), which are in circulation for a total amount of USD 2.6 billion, participated in an exchange offer and voted to approve the proposed extraordinary resolution, which provides for a full exchange of GDP warrants for ordinary Ukrainian debt securities. This significant achievement is an important step towards strengthening Ukraine's debt sustainability and increasing budget predictability by withdrawing from circulation GDP warrants issued in 2015 as part of a previous restructuring of public debt caused by the annexation of Crimea and Russia's invasion of Donbas.
The Ministry of Finance emphasizes that this transaction will strengthen the state's further steps to enhance macroeconomic stability and public debt sustainability, allowing it to avoid significant payments during the post-war reconstruction period and preserve resources needed to finance the country's defense amid Russia's full-scale invasion.
After comprehensive negotiations with GDP warrant holders, 99.06% of them supported the restructuring agreement, exceeding the required threshold of 75%. This means that Ukraine will convert almost the entire outstanding notional amount of GDP warrants into a new class C bond maturing in 2032 for USD 3.497 billion (and a small portion into class B bonds maturing in 2030 and 2034 for approximately USD 34 million) in accordance with the terms of the offer. As part of this transaction, Ukraine will also cancel GDP warrants totaling USD 604 million held by the state. Thus, Ukraine completely withdraws this instrument from circulation.
In addition, the Ministry of Finance emphasizes that this restructuring significantly reduces the risks that GDP warrants posed to Ukraine's public finances. According to the Ministry of Finance's calculations, cumulative payments on them in 2025–2041 could range from USD 6 billion to USD 20 billion, depending on the country's economic growth rates during the recovery period. Such excessive volatility is due to the nature of this instrument: after 2025, payments are unlimited and linked to annual real GDP growth — without protection against the risk of economic downturns, which may be followed by a sharp recovery, leading to payments that do not correspond to economic reality. Payments on GDP warrants are made if annual real GDP growth exceeds 3% and nominal GDP exceeds USD 125.4 billion, and are calculated as 15% of annual GDP growth between 3% and 4% and 40% of real GDP growth above 4%.
Ukraine's GDP contracted by almost 30% in 2022 due to Russia's full-scale invasion. In 2023, the economy grew by 5.3%, which triggered a payment requirement for GDP warrants totaling USD 643 million, despite the lack of real improvement in the country's economic situation. This requirement was fully settled as part of this restructuring.
Will allow Ukraine to save billions of dollars in potential payments
Serhiy Marchenko, Minister of Finance of Ukraine, commented on the successful completion of the operation.
This restructuring will allow Ukraine to save billions of dollars in potential payments during the post-war recovery period. The conversion of GDP warrants into standard debt instruments with an aggregation mechanism ensures predictability and reduces long-term volatility of public finances. We are withdrawing a toxic instrument that posed a serious fiscal risk to Ukraine and could jeopardize our recovery and reconstruction. The completion of the GDP warrant restructuring agreement is an important step on Ukraine's path to ensuring long-term public debt sustainability and a faster return to international capital markets after the security situation improves. This agreement will help Ukraine achieve the debt targets set by the IMF program and meets the expectations of our bilateral partners — the Group of Official Creditors of Ukraine. I would like to thank all our partners for their support in the process of finding a solution to reduce our debt burden.
Yuriy Butsa, Government Commissioner for Public Debt Management, emphasized that the restructuring will make Ukraine's debt structure more predictable and sustainable.
By restructuring GDP warrants, we are eliminating one of the key risks identified in our Public Debt Management Strategy, making Ukraine's debt structure more predictable and sustainable even in adverse conditions. As a result of this transaction, Ukraine strengthens its position to overcome the challenges associated with financing post-war recovery. We are firmly committed to continuing to ensure Ukraine's debt sustainability, which is critically important for maintaining financial stability and building a stronger and more prosperous economic future for our country.
The Ministry of Finance added that thanks to the positive outcome of the vote on Ukraine's proposal, announced on December 1, the restructuring process will now move to the settlement stage, which will take place in the coming days and be completed by the end of the current year.