Ukraine needs support of its Eurobond holders, there is still time to find right solution - finance minister
MOSCOW. April 27 (Interfax) - The crisis has serious consequences for the Ukrainian economy, so the future solution to the issue of the country's Eurobond debt should take into account, primarily, Ukraine's interests, its capabilities and at the same time maintain the country's support on the market and its prospects to return to it if required, Finance Minister Sergei Marchenko said.
"It is important for us not to take any steps that would affect very strongly the reputation and credibility of Ukraine as a reliable borrower that always fulfills its obligations," he said in an interview with Ukrainian media.
Commenting on the idea promoted by the World Bank and the International Monetary Fund (IMF) to create a common sovereign debt restructuring scheme for those countries in need of such restructuring and, in particular, a standstill in debt servicing at the beginning of the talks, Marchenko noted that Ukraine has a standstill with Eurobond holders until mid-2024.
"We do not service external liabilities, and this issue is not relevant enough for Ukraine now. There is some time to find the right solution, primarily taking into account Ukraine's interests," the minister said.
At the same time, he once again noted that at the same time one has to think for the future. "If we want to attract investors for the recovery, we should not take any steps that could harm this," the finance minister said.
As reported, the Group of Creditors of Ukraine (Paris Club) on March 23, 2023 provided financial guarantees for the new Extended Fund Facility with the IMF, which provides for extending the standstill on Ukraine's debt payments to the countries of the Group for the period of its validity (2023-2027). A condition for this grace period is similar actions on the part of Ukraine's private external creditors, mainly Eurobond holders.
For its part, the Finance Ministry said on March 24 that during the program the Ukrainian government is committed to take a number of measures to manage the public external debt in order to achieve three goals: to restore debt sustainability; to preserve liquidity and reduce the financing deficit; and to create the conditions required for the commercial sector to join in the post-crisis recovery. The government has hired financial and legal experts to support this process.
The Finance Ministry expects to begin talks with commercial creditors on a new debt restructuring in early 2024 in order to conclude them no later than in mid-2024, the statement said.
On July 20, 2022, the Paris Club has already made a similar statement on its readiness to suspend servicing Ukraine's public debt until the end of 2023, calling on the holders of Ukraine's Eurobonds to accept the country's offer of a two-year grace period on their payments, which took place in August of the same year.