Ministry of Finance of Ukraine welcomes the successful restructuring of two sovereign-guaranteed loans extended by Sberbank of Russia

The Ministry of Finance of Ukraine welcomes today’s successful restructuring of the sovereign-guaranteed term facility agreements between Sberbank of Russia and each of Ukravtodor and Yuzhnoye State Design Office (together the “Bilateral Loans”).

Pursuant to the restructuring, the outstanding principal balance of the Bilateral Loans (approximately $367 million) and accrued interest thereon was discharged in full, and the Bilateral Loans were terminated, in exchange for the delivery to Sberbank of (i) U.S.$284,152,000 aggregate principal amount of Ukraine’s 7.75% Senior Notes due 2019, representing 75% of the outstanding principal balance of the Bilateral Loans (plus accrued interest), and (ii) U.S.$ 91,857,000 aggregate notional amount of Ukraine’s GDP-linked Securities, representing the remaining 25% of the outstanding principal balance of the Bilateral Loans. Therefore, the debt was reduced by 25%.

The restructuring of the Bilateral Loans was conducted in full compliance with the financing targets established in Ukraine’s Extended Fund Facility with the IMF agreed in March 2015.

The Ministry of Finance hopes that this successful restructuring with Sberbank, which was the product of a consensual and collaborative process, can serve as the basis for the restructuring of other outstanding sovereign guaranteed loans within the scope of Ukraine’s debt operation.

Ukraine remains committed to finding a good faith resolution of all remaining external debt issues consistent with the constraints imposed by the IMF Extended Fund Facility and the contractual terms of the agreement reached in November 2015 with sovereign bondholders.