The Cabinet of Ministers took advantage of the right granted by the Verkhovna Rada and introduced a temporary moratorium on payments on Ukrainian Eurobonds for the period of restructuring negotiations. This was reported on the Cabinet of Ministers website.
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“Temporarily suspend from August 1, 2024, the execution of payments on state debt obligations related to the payment of interest income on 2018 external government loan bonds,” the document says.
This means that Ukraine will not pay the coupon payment of $34 million on Eurobonds due 2026, maturing on August 1.
As part of the restructuring, Ukraine will issue new government bonds.
Part A bonds will be placed for a principal amount not exceeding 40% of the outstanding principal amount of existing bonds, maturing in 2029-2036. Interest on the new bonds will be paid semi-annually on February 1 and August 1 at a rate that will gradually increase from 1.75% to 7.75%.
Part B bonds will be placed for a principal amount not exceeding 23% of the outstanding principal amount of existing bonds, maturing in 2030-2036. Interest on the new bonds will be paid semi-annually on February 1 and August 1 at a rate that will gradually increase from 0% to 7.75%.
Thus, owners of existing bonds must agree to write off 37% of the debt (but under certain conditions after 2029 it may decrease to 25%).
Recall
The Ministry of Finance wrote that Ukrainian President Volodymyr Zelensky signed Law No. 11396, allowing the government to suspend payments on external debt until October 1.
