Ukraine starts second round of negotiations on restructuring of Eurobonds – Bloomberg

A group of Ukrainian bondholders have signed nondisclosure agreements to begin a second round of formal talks with the Ukrainian government to restructure more than $20 billion in debt, reported Bloomberg with reference to its sources.

Negotiations began this week on the eve of the end of the moratorium on Ukrainian debt payments on August 1 , agency sources said.

In June, during the first round, Ukraine was unable to agree with the private owners of Ukrainian Eurobonds on the restructuring of payments.

Earlier, the Ministry of Finance reported that Ukraine's proposal is to exchange all 13 series of Eurobonds either for a series of fixed income instruments (vanilla bonds) and state-contingent instruments (option 1), or for a series of vanilla bonds (option 2).

The derivative instruments from option 1 will be converted into vanilla bonds with a fixed yield in 2027, the nominal value of which will depend on the indicators of tax revenues of Ukraine and the achievement of indicators of GDP growth according to the basic forecast of the IMF.

Both options of the restructuring proposal envisage a nominal reduction of the debt from 25% to 60%, depending on the pace of the country's recovery during the period of the IMF program.

The official foreign debt of Ukraine is already subject to a moratorium on payments until 2027.

On July 18, 2024, the Verkhovna Rada is considering the possibility of a moratorium on public debt payments.