Ukraine, which has been attacked by Russia, constantly needs new money to be able to continue the war. Now, at the last minute, an agreement has been reached with private creditors to restructure old debts.
Ukraine, which is cash-strapped by the defensive struggle against the Russian war of aggression, has agreed to a debt restructuring with private creditors and thus averted a default. “The agreements reached provide for a reduction in Ukrainian debt by reducing the value of the Eurobonds by 37 percent in nominal terms in the initial phase,” said Finance Minister Serhiy Marchenko. The total debt will fall by the equivalent of almost eight billion euros with the issue of new bonds and maturities between 2029 and 2036.
Originally, the bonds were due to be repaid between 2024 and 2029. Including interest, the creditors waived around 60 percent of the originally agreed payments. Ukraine will thus save the equivalent of just over 20 billion euros by 2033, it was said. “This will free up important financial resources that can be used for defense and social spending,” stressed Marchenko.
At the end of June, the British business magazine “The Economist” warned that Ukraine would default on its debts in August if no agreement was reached with private creditors on debt restructuring. State lenders had granted Kyiv a suspension of debt service until 2027. The Eastern European country has been defending itself against the Russian invasion with strong Western help since February 2022.
Source: Stern
