Ukraine to temporarily suspend payments on GDP warrants next year, government says
2024.08.27 18:27
(Reuters) -Ukraine will temporarily suspend payments on GDP warrants starting from May 31, 2025, according to government decision published on the official website late on Tuesday.
Kyiv will also temporarily suspend payments for loans from Cargill Financial Services International, Inc, starting from Sept. 3, and on government-guaranteed bonds of Ukrainian power firm Ukrenergo starting from Nov. 9, according to the document.
The GDP warrants and private debt obligations are not part of the country’s sovereign restructuring deal that the government of the war-torn country is expected to finalise any time now.
With the Russian war in Ukraine now in its third year, the Kyiv government relies heavily on foreign financial aid to be able to finance its social and humanitarian payments. The bulk of Ukraine’s state revenues goes to defence efforts.
The GDP warrant, an instrument linked to the country’s economic output growth was created during Ukraine’s 2015 debt restructuring in the wake of Russia’s annexation of Crimea as a sweetener to creditors. JPMorgan calculates that Ukraine owes $2.6 billion on this instrument.
About $700 million is owed to U.S. agribusiness giant Cargill and the state grid company Ukrenergo has a government guarantee on a $830 million note.
