Representatives of Ukraine have not yet been able to agree on the terms of restructuring the state debt, which includes GDP-linked bonds, according to international media and an official statement from the country’s government on the Euronext exchange website. Reports indicate that Ukrainian representatives held a meeting with certain members of the committee of holders of securities linked to the country’s GDP (bonds), which total over 3.23 billion dollars. The holders of these securities expressed disagreement with Ukraine’s proposal and submitted a counterproposal; however, the situation remains unresolved.
This is reported by Kyiv24
“Ukraine stated that it cannot accept the proposal from the limited holders and has rejected further proposals from limited holders until the end of the Limited Period. Ukraine intends to continue engaging with the holders of the Bonds and consider all available options”
Future Payments and Debt Restructuring Prospects
According to financial publications, Ukraine is set to make a payment of 600 million dollars on its debt obligations in May or declare a default. Finance Minister Serhiy Marchenko emphasized that Russian aggression has caused significant economic losses, already estimated in the hundreds of billions of euros. According to the official, the costs of rebuilding the country could exceed 500 billion euros over the next decade, making it crucial to maintain financial stability and debt sustainability.
Marchenko noted that the GDP-linked bonds were created under conditions that no longer exist and should not hinder Ukraine’s recovery. The government aims to find a fair and comprehensive solution to this issue. According to him, the meeting with the holders of the GDP-linked bonds took place from April 15 to 23 and was organized with representatives of the Special Committee, which includes holders of about 30% of such debt obligations. Ukraine proposed exchanging the bonds for additional eurobonds or changing the terms of their issuance.
In response, committee members proposed to pay 75% of the May payment based on GDP growth in 2023 and issue new bonds with a 7.75% interest rate amounting to 209 million dollars, maturing in February 2029. Ukraine rejected these proposals while remaining open to constructive negotiations to find a long-term solution that would not hinder the country’s reconstruction.
The IMF Executive Board completed the seventh review of the extended funding program for Ukraine on March 28, allowing for the disbursement of 0.4 billion dollars aimed at supporting the budget. The total amount of disbursements under this program will reach 10.1 billion dollars.