Serhiy Marchenko. Photo: X
Ukrainian Finance Minister Serhiy Marchenko announced on Monday that Ukraine had reached an agreement to restructure its international debt of over $20 billion (€18.4 billion) to avoid a potential default.
“Once completed, this restructuring will pave the way for Ukraine’s return to the market as soon as possible, when the security situation stabilises, to finance the rapid recovery and reconstruction of our country,” Marchenko wrote in a post on Facebook.
According to Marchenko, the agreement, which was negotiated with a committee representing the consortium of banks that have lent money to Ukraine, will save Kyiv $11.4 billion (€10.5 billion) in debt service over the next three years and another $22.7 billion (€20.1 billion) by 2033.
The deal, which must still be approved by at least two thirds of all bondholders before it is finalised, will involve the exchange of existing bonds for new ones, resulting in a nominal reduction of the debt’s value by 37%.The committee has also agreed to waive $8.67 billion (€8 billion) in claims, according to a press release issued by the London Stock Exchange.
In 2022, The Wall Street Journal reported that Ukraine’s creditors had agreed to suspend Kyiv’s debt payments for two years, on the basis that the war would be over by 2024. However, in December, Reuters reported that Kyiv had begun talks with borrowers on restructuring state debt and securing new financing.
Had it not reached an agreement, Ukraine would have risked defaulting on its foreign loans when its current debt holiday expires in August, damaging Kyiv’s reputation among creditors and complicating future loan acquisitions.
