Ukraine to suspend repayment of $700-mln debt to Cargill Financial, $825-million Ukrenergo Eurobond guarantee

MOSCOW. Aug 27 (Interfax) - Ukraine will suspend repayment of loans from Cargill Financial Services International, the amount of which, according to the Ministry of Finance, was $703.7 million at the end of July and the repayment is due in 2024-2026, on September 3, 2024.

The Ukrainian government passed the related resolution on Tuesday and published it on its website, following the Eurobond restructuring, Ukrainian media said.

The resolution says repayment of the state's guarantee for Ukrenergo Eurobonds, originally issued in 2021 in the total amount of $825 million, which mature on November 9, 2028, will be suspended from November 9.

The Ukrainian parliament enabled the government to do so with a bill dated July 18, 2024.

The new government resolution allowed the Finance Ministry to pay not only the consent fee but also the first part of the performance fee in connection with the restructuring of Eurobonds, but the total amount of these payments is still limited to $246 million. It said the payments are provided for, in particular, in the offer to exchange Eurobond holders and the letter of agreement on the provision of agent services.

As reported, Ukraine announced on July 22 it had reached fundamental agreements on restructuring its Eurobond debt in the amount of about $23 billion with a special committee of Eurobond holders. The agreements envisage writing off 37% of the debt with the possibility of restoring 12% if a certain level of GDP is reached in 2028. The remaining debt will be issued as new Eurobonds maturing in 2029-2036, with interest rates gradually increasing from 1.75% in the coming years to 7.75% at the end of the circulation period. A reward of 1.25% of the amount of the exchanged Eurobonds will be paid for voluntary participation in such an exchange.

The transaction requires consent of two-thirds of the holders of all securities and at least half of the holders of each issue, provided that less than a quarter of the holders of each issue are against such an agreement. Applications will be accepted until 5:00 p.m. New York time on August 27, with settlements expected on August 30.