The Government of Ukraine - Debt Restructuring - News

Ukraine entered into the consultation period with the Ad Hoc Creditor Committee and the Investors to discuss, under non-disclosure agreements, the potential terms of a restructuring of Ukraine’s thirteen series of outstanding Eurobonds (the “Eurobonds”)

17 JUNE 2024

Full announcement including disclaimers and offer restrictions available via Euronext

Kyiv, Ukraine: The Government of Ukraine (“Ukraine”) announces today that over a twelve-day period from 3 to 14 June 2024, representatives of Ukraine held meetings with members of the ad hoc creditor committee (the “Ad Hoc Creditor Committee”) comprised of a number of major institutional asset managers and other long-term investors in Ukraine representing around 20% of the outstanding amount of Ukraine’s Eurobonds, as well as with certain other holders of Eurobonds (“Investors”) on a bilateral basis. Ukraine entered into the consultation period with the Ad Hoc Creditor Committee and the Investors to discuss, under non-disclosure agreements, the potential terms of a restructuring of Ukraine’s thirteen series of outstanding Eurobonds (the “Eurobonds”) listed in Annex A.

Ukraine was joined by its legal and financial advisors, White & Case LLP and Rothschild & Co, respectively, and the Ad Hoc Creditor Committee were joined by their legal and financial advisors, Weil, Gotshal and Manges (London) LLP and PJT Partners (UK) Ltd, respectively.

As part of the ongoing restructuring process, the consultation period was designed to enable Ukraine to deliver to the Ad Hoc Creditor Committee and the Investors a restructuring proposal and to enable the Ad Hoc Creditor Committee and the Investors to directly engage and exchange ideas with Ukraine and its advisors. In addition, the Ad Hoc Creditor Committee were provided the opportunity to directly engage with staff of the International Monetary Fund (“IMF”) and the Secretariat of the Group of Creditors of Ukraine (“GCU”).

As detailed in Annex B, Ukraine’s proposal (the “Sovereign Proposal”) consisted of the exchange of the Eurobonds for either (i) a package of fixed income instruments (the “Vanilla Bonds”) and state-contingent instruments (the “SCDIs”) (“Option 1”) or (ii) a package of Vanilla Bonds (“Option 2”). In relation to Option 1, the SCDIs would be converted into Vanilla Bonds based on a single test in 2027 with a face value dependent upon Ukraine’s performance on tax revenues, subject to meeting conditions around real GDP levels projected in the IMF’s baseline scenario. As such, if the revenue test and GDP target is met, the SCDIs would be replaced by fixed-income instruments of Ukraine whose cash flows would be certain. Both options have been designed to deliver holders cash flows during the IMF program period and provide for a nominal haircut ranging between 25 and 60% depending on the country’s recovery over the IMF program period. The Sovereign Proposal also incorporated certain legal terms, including a “loss reinstatement” provision and a “most-favoured creditor” clause."

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