Ukraine's country creditors urge Eurobond holders to carry out restructuring quickly
MOSCOW. Aug 12 (Interfax) - The Group of Creditors of Ukraine (GCU) welcomes the agreement in principle that Ukraine reached with an ad hoc committee of bondholders on the terms for restructuring its Eurobond debt, Ukrainian media reported, citing a statement on the Canadian Department of Finance website.
"The Group confirms it is comfortable with the agreement that has been confirmed by the IMF staff as compatible with the debt sustainability objectives of Ukraine's Extended Fund Facility ("EFF"), under the baseline macroeconomic framework of the fourth review dated June 28, 2024, taking into consideration the authorities' overall restructuring strategy," the statement said.
The group of country creditors urged Eurobond holders to quickly consent to Ukraine's offer to exchange the Eurobonds for new bonds, which was officially published on August 9.
"Swift implementation of the exchange would demonstrate substantive support for the government and people of Ukraine by providing substantial debt relief," the statement said.
The GCU includes Canada, France, Germany, Japan, the United Kingdom and United States. Observers to the group include Australia, Austria, Belgium, Brazil, Denmark, Finland, Ireland, Israel, Italy, South Korea, the Netherlands, Norway, Spain, Sweden and Switzerland.
Ukraine announced on July 22 that it had reached agreement in principle on restructuring with an ad hoc committee of holders of its Eurobonds totaling about $23 billion that call for writing off 37% of the debt with the possibility of restoring 12% if the country reaches a certain GDP level in 2028.
For the remaining debt, Ukraine will issue new Eurobonds maturing in 2029-2036 with a yield that will gradually grow from 1.75% in the next few years to 7.75% at the end of the term. Payment for consent will be 1.25% of the amount of bonds being exchanged.
Ukraine initially expected to conclude all negotiations with bondholders by August 1, the deadline for payments under the terms of a 2022 restructuring. But this did not happen and as of August 1 the government imposed a temporary moratorium on Eurobond payments for the duration of the restructuring.
Under the conditions of the exchange offer and consent solicitation that Ukraine published on August 9, the deadline for bondholders to submit instructions to participate in the exchange is August 27, the results will be announced on August 28 and all settlements will be made on August 30 and the subsequent five days.
In order to go ahead, the exchange requires the consent of two thirds of all bondholders and at least half of the holders of each issue, on the condition that less than a quarter of holders of each issue are opposed to such consent.
