IMF optimistic about preparations for Ukraine's Eurobond restructuring, expects details
MOSCOW. March 22 (Interfax) - While credible progress has been made in restructuring Ukraine's foreign commercial debt, the International Monetary Fund (IMF) expects the conclusion of technical discussions to receive details of the proposal to judge about its compliance with the Extended Fund Facility, Ukrainian media quoted IMF Deputy Mission Chief for Ukraine Sanaa Nadeem as saying.
Asked about her opinion of a new debt sustainability analysis as part of the EFF Third Review at a press briefing late on Thursday, Nadeem said technical discussions were still ongoing and were expected to pick up in coming weeks, and the IMF should see a specific proposal to have the full picture and be able to say whether it would fully comply with the program's parameters.
The IMF excluded some $3 billion from Ukraine's debt for Eurobonds that Russia bought at the end of 2014, which had been contested by the Ukrainian authorities, Nadeem said.
IMF Mission Chief for Ukraine Gavin Gray said the IMF was closely following the situation surrounding Russian assets immobilized in the West. However, as the IMF has to treat all its members neutrally, it cannot be involved in this discussion directly, he said.
As reported, ahead of the IMF's approval of a new four-year EFF for Ukraine worth $15.6 billion at the end of March 2023, the group of Ukraine's formal creditors (the Paris Club) following a meeting with IMF and World Bank representatives provided financial guarantees for the program. This includes further standstill in Ukraine's payment of debts to the group members throughout the EFF period (2023-2027). The standstill is conditioned on similar actions of Ukraine's private foreign creditors, mostly Eurobond holders.
The Ukrainian Finance Ministry said on March 24, 2023 that the Ukrainian government pledged to take a number of measures in the EFF period to manage the sovereign debt and achieve three objectives, namely, restore debt sustainability, maintain liquidity and reduce the financing gap, and provide the necessary conditions for the commercial sector to participate in the post-crisis recovery.
"The Ukrainian authorities will explore a number of alternate scenarios to ensure the debt payment and maximize the efficiency and success of the process, while being aware of the goal of the soonest restoration of Ukraine's access to the market. The Ukrainian government has hired financial and legal consultants to support the process," the ministry said at the time.
The ministry said it expected to begin talks with the holders of $20 billion in Eurobonds on a new rescheduling at the beginning of 2024, so that the talks could be finalized by mid-2024.