Ukraine agrees on restructuring of Eurobonds: conditions
Ukraine has reached an agreement in principle with the committee of owners of Eurobonds of Ukraine regarding debt restructuring. This was announced by Prime Minister Denys Shmyhal.
"Today, we have reached an agreement in principle with the Ad Hoc Creditor Committee. This is an important stage of the debt restructuring process, which will save us $11.4 billion in debt servicing over the next three years and $22.75 billion by 2033. This allows us to free up resources for our defence, social spending and reconstruction," the prime minister's X post says.
He thanked the team of the Ministry of Finance for this work.
The website of the London Stock Exchange reports that the restructuring will concern 13 series of outstanding Eurobonds of Ukraine, as well as outstanding Eurobonds of the state road agency Ukravtodor.
| Tool | Rate | Maturity period |
| USD 912 million | 7.75% | September 2024 |
| USD 1.355 billion | 7.75% | September 2025 |
| USD 750 million | 8.994% | February 2026 |
| USD 1.34 billion | 7.75% | September 2026 |
| USD 1.33 billion | 7.75% | September 2027 |
| EUR 1 billion | 6.75% | June 2028 |
| USD 1.32 billion | 7.75% | September 2028 |
| USD 1.31 billion | 7.75% | September 2029 |
| USD 1.6 billion | 9.75% | November 2030 |
| USD 1.75 billion | 6.876% | May 2031 |
| EUR 1.25 billion | 4.375% | January 2032 |
| USD 3 billion | 7.375% | September 2034 |
| USD 2.6 billion | 7.253% | March 2035 |
| USD 700 million (Ukratodor) | 6.25% | 2030 |
Each series will be exchanged for a package of new bonds series A (40% of the total amount) and series B (23% of the total amount).
Ukraine will resume regular coupon payments of series A bonds from August 1, 2024 at a preferential rate of 1.75%. From February 1, 2026, it will increase to 4.5% per annum, from August 1, 2027 – to 6% per annum, from February 1, 2024 – to 7.75% per annum.
The first repayments of the bond body will begin in 2029 (12.5% in 2029, 32.5% in 2034, 30% in 2035, 25% in 2036).
Payments on bonds of series B will resume from August 1, 2027 at 3%, from February 1, 2034 the rate will increase to 7.75%.
The first repayments of the bond body will begin in 2030 (9.5% in 2030, 35.5% in 2034, 30% in 2035, 25% in 2036).
In addition, under certain conditions, in 2029, Ukraine may issue additional series B bonds for 12% of the debt with repayment in 2035 and 2036, depending on the GDP growth rate.
The Ministry of Finance reported that the first repayment in the amount of $1.172 billion will take place in 2029. By comparison, without the restructuring, the principal amount of $9.381 billion (excluding capitalized interest) would have been due between 2024 and 2029.
The agreements reached provide for the reduction of Ukraine's debt through a nominal reduction in the value of Eurobonds by 37% at the initial stage, which will reduce the volume of debt by $8.67 billion, and a reduction in the net present value of the debt by approximately 60%.
"This is the level that will allow us to restore debt sustainability, fulfill the objectives of the IMF program and comply with agreements with international partners," the Ministry of Finance said.
There is still no agreement with holders of GDP warrants.
On June 17, Ukraine offered creditors to write off from 25% to 60% of Eurobonds. They did not agree, but negotiations continued.
Ukraine had until August 1. There is already a moratorium on official foreign debt repayments until 2027, while the pause in Eurobond payments expires in August 2024.
