Restructuring deal: four years’ maturity extension, 7.75 flat coupon rate, 20% haircut

UKRAINE - In Brief 27 Aug 2015 by Dmytro Boyarchuk

Yesterday Ad Hoc creditors’ committee agreed for $18.0 billion Ukrainian debt restructuring. The agreement does not include loans of state-owned entities with sovereign guarantee, City of Kyiv Eurobonds and Ukrzaliznytsia Eurobonds. The deal presumes 20% haircut. Current Eurobonds will be exchanged for new instruments with flat 7.75% coupon rate maturing during 2019-2027. Also creditors will receive value recovery instrument in the form of real GDP growth warranty. The instrument presumes payments through the period of 2012-2040. Ukraine will pay 15% of the value of the GDP growth if GDP grows more than 3% (no more than 4%) and 40% of the value of the GDP growth if GDP grows 4%. Total payments capped at 1% of GDP from 2021 until 2025. According to the deal Ukraine saves $4.1 billion in 2015 due to debt extension which is very positive for gross international reserves' accumulation (reserves will increase at least to $16 billion this year).

Now read on...

Register to sample a report