Ukraine has reached an agreement with the Eurobondholders' Committee on the restructuring of its external debt. This will save $11.4 billion on debt service over the next three years.
By 2033, the savings will amount to $22.75 billion. This was reported by Prime Minister Denys Shmyhal.
"We are restoring debt sustainability. Today, we have reached agreements in principle with the Committee of Eurobond Holders of Ukraine. This is an important stage in the debt restructuring process, which will save USD 11.4 billion in debt service over the next three years and USD 22.75 billion by 2033," he explained.
The saved funds are to be used for defence, social protection and recovery.
Finance Minister Serhiy Marchenko added on Facebook that negotiations with private and official creditors and the International Monetary Fund had lasted for months. The current agreement concerns a comprehensive restructuring of the state's external commercial debt.
"The agreement will save USD 11.4 billion in debt service over the next 3 years. By 2033, the savings will amount to USD 22.75 billion. This will free up vital financial resources that can be used for defence and social spending. The completion of this restructuring agreement will create the conditions for Ukraine's early return to the international capital market once the security situation stabilises to finance the rapid recovery and reconstruction of our country," he explained.
- Ukraine has $19.7bn in outstanding bonds and owes $2.6bn in GDP warrants, a fixed-income instrument whose repayments are linked to economic growth. The warrants were created as part of Ukraine's debt restructuring in 2015. Ukraine offered to write off 25 to 60% of its debt, depending on the situation in the country. Creditors offered no more than 20%. If the negotiations were to reach a deadlock, it would be a powerful incentive for the hryvnya to appreciate in all segments of the currency market. If the restructuring terms prove favourable for Ukraine, the national currency will remain relatively stable until at least autumn 2024.