Ukraine completes public debt restructuring

Ukraine has successfully completed the restructuring of its public and publicly guaranteed debt, totaling about USD 20.5 billion.

The relevant statement was made by the Ukrainian Finance Ministry, an Ukrinform correspondent reports.

“Ukraine announced the successful completion and settlement of its debt restructuring operation for thirteen series of sovereign Eurobonds and the sovereign-guaranteed Eurobonds issued by Ukravtodor,” the report states.

The restructuring process involved the exchange of thirteen series of sovereign Eurobonds and one series of the Ukravtodor sovereign-guaranteed Eurobonds, with approximately USD 20.5 billion of outstanding principal amount (around USD 24 billion including accrued interests), into eight new Eurobonds series with USD 15.2 billion in principal amount.

Following this transaction, Ukraine’s public debt reduced by about USD 9 billion. This represents an upfront nominal haircut of 37% and a present value haircut of approximately 60%.

Additionally, the debt service payments will decrease by 93%, leading to savings of USD 11.4 billion in the next three years.

By 2033, the debt servicing and repayment costs will reduce by 77%, generating the total savings of USD 22.8 billion.

“I am grateful to our investors and official sector partners for the continued support throughout this debt restructuring process. This successful outcome is a testament to the constructive collaboration and our shared commitment to Ukraine’s long-term macro-financial stability,” Government Commissioner for Public Debt Management Yuriy Butsa noted.

The restructuring was executed in collaboration with White & Case as legal advisors and Rothschild & Co as financial advisors to the Ukrainian Finance Ministry.

A reminder that, on August 9, 2024, Ukraine announced an exchange offer and consent solicitation for its existing Sovereign Eurobonds and Ukravtodor Guaranteed Eurobonds.

On August 28, 2024, the Ukrainian Finance Ministry reported that, during voting on August 9-27, 2024, 97.38% of bondholders supported Ukraine’s debt restructuring deal, which exceeds the required threshold of two-thirds.

The program of Ukraine’s cooperation with the IMF provides for a two-stage restructuring of the external debt, in 2024 and 2026.