Factbox-Key aspects of Ukraine’s unprecedented $20 billion debt restructuring deal
2024.07.22 06:39
LONDON (Reuters) – Ukraine announced on Monday a preliminary deal with a bondholder group to restructure $19.7 billion in debt. The ad hoc group controls 22% of the bonds, and the government said investors holding an additional 3% of bonds, also indicated their support for the deal.
Key aspects of the agreement, which bondholders must now vote to approve, include the following points.
HAIRCUT
– A 37% nominal haircut on Ukraine’s outstanding international bonds which would save the country $11.4 billion in payments over the next three years.
NEW BONDS
– Two series of bonds issued to replace the existing claims.
– The first, a standard bond series, would make up 40% of outstanding claims. It would start paying interest from next year, with maturities ranging from 2029-2036. It would amortise from 2029.
– A second series making up 23% of the outstanding claim is designed to mature between 2030-2036.
– The second series would not pay interest until 2027, but would include a contingent component, meaning that if the economy outperformed IMF expectations in 2028, payments could ramp up and the overall haircut could be reduced to 25%.
– Both sets of bonds are expected to be index-eligible by leading providers – a key factor for investors.
BONDS ISSUED BY STATE-OWNED FIRMS
– Bonds issued by state agency Ukravtodor – which is in charge of building and maintaining roads – would receive the same treatment as sovereign bonds. The government statement did not mention power grid operator Ukrenergo’s bonds.
BONDS AND WARRANTS
– The deal would remove cross default clauses between the bonds and Ukraine’s $2.6 billion GDP warrants.
– While the warrants were not restructured, the government said it would “ensure the fair and equitable treatment of holders of the warrants in any prospective future liability management.”
