Ukraine was unable to reach an agreement with creditors on debt restructuring for $20 billion

Ukraine and a special committee of creditors, representing the owners of almost 20% of Eurobonds, held negotiations and exchanged proposals on debt restructuring in the period from June 3 to 14. However, the parties were unable to reach an agreement due to the inadmissibility of the terms proposed by the commercial creditors for the IMF and the Group of Official Creditors of Ukraine.

According to the report, the lenders’ proposal was assessed by IMF staff as falling short of the debt sustainability analysis (DSA) targets. The Secretariat of the Group of Creditors of Ukraine also confirmed that any cash flows during the duration of the IMF program should remain symbolic.

The main differences:

• Lenders: offered to reduce the value of bonds by 22%.
• IMF: Said it would lead to key debt defaults.
• Ukraine: offered a contingency instrument, under which payments can only begin after 2027 and depend on Ukraine meeting tax revenue targets set by the IMF.

Further steps:

• Ukraine: will consult with Eurobond holders outside of the Eurobond Holders Committee and gather feedback from the wider investor community.
• The parties will: continue to interact and have constructive discussions through their respective advisors.
• Agreement reached: expected by August 1, 2024.