Ukraine Completes the Restructuring of USD 20.5 Billion Sovereign and Sovereign-Guaranteed Eurobonds

Ukraine announced the successful completion and settlement of its debt restructuring operation for thirteen series of sovereign Eurobonds and the sovereign-guaranteed Eurobonds issued by Ukravtodor.

This transaction was undertaken to restore Ukraine’s debt sustainability, preserve macroeconomic stability, and free up state budget resources in the face of continued Russian military aggression against Ukraine.

The restructuring process involved the exchange of thirteen series of sovereign Eurobonds and one series of the Ukravtodor sovereign-guaranteed Eurobonds, with approximately USD 20.5 billion of outstanding principal amount (around USD 24 billion including accrued interests), into eight new Eurobonds series with USD 15.2 billion in principal amount. 

As a result of this transaction, Ukraine’s state and state guaranteed debt has been reduced by close to USD 9 billion. This represents an upfront nominal haircut of 37% and a present value haircut of approximately 60%, based on a 14% discount rate—making it one of the largest haircuts in recent sovereign debt restructurings.

The restructuring decreases immediate debt servicing payments by 93%, leading to savings of USD 11.4 billion over the next three years. Moreover, debt servicing costs through 2033 will be reduced by about 77%, generating total savings of USD 22.8 billion.

“We are grateful to our investors and official sector partners for the continued support throughout this debt restructuring process. This successful outcome is a testament to the constructive collaboration and our shared commitment to Ukraine’s long-term macro-financial stability. Despite the ongoing challenges posed by Russian aggression, we have taken a decisive step to secure Ukraine’s financial sustainability, ensuring that critical resources are allocated where they are most needed. We remain dedicated to maintaining the trust of our creditors and the international community, as we continue to navigate these unprecedented times,” commented Yuriy Butsa, Government Commissioner for Public Debt Management.

This deal aligns with the IMF’s Program debt sustainability targets and has been endorsed by Ukraine’s Group of Creditors.

The restructuring was executed in collaboration with White & Case as legal advisors and Rothschild & Co as financial advisors to the Ministry of Finance of Ukraine.