Ukraine’s State Railways Company, Ukrzaliznytsia (UZ) has to repay Eurobond debts worth over $700 million in July 2026.
UZ issued Eurobonds worth $595 million in 2019, aiming to repay them in July 2026. The company then issued Eurobonds worth $300 million in 2021, aiming to repay them by 2028.
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But the company now has to meet other needs, caused by Russia’s full-scale invasion of Ukraine.
Now, UZ is exploring ways to manage its Eurobond debt, but has warned investors it may be unable to repay the full amount.
“In July 2026, the company must repay a large portion of its Eurobond debt. Combined with the need to fund ongoing operations, capital investments, and post-war recovery, this creates uncertainty about its ability to meet Eurobond obligations,” the UZ annual report for 2024 says.
UZ set a standstill for Eurobond payments in December 2022, receiving the bondholders’ consent to restructure Eurobonds to the tune of $895 million.
Back then, the payment of the principal debt had been deferred for two years: the repayment of Eurobonds issued in 2019 was postponed to 2026 from 2024, and those issued in 2021 postponed from 2026 to 2028.
In January 2025, UZ paid coupon payments from the 2022 debt restructuring: $108.3 million for the 2026 Eurobonds (8.25% rate) and $51.9 million for the 2028 Eurobonds (7.9% rate). This raised the principal debt to $703.2 million and $351.9 million, respectively.
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The company also paid $38.3 million in coupons accrued from July 2024 until the date of capitalization, the report says.
According to a UZ report, as of Dec. 31, 2024, the company “complied with all financial and non-financial covenants related to its Eurobonds and interest-bearing loans and borrowings, and met its financial obligations on time.”
In the future, UZ also “plans to provide timely servicing of its loan portfolio”, the report says.
Ukraine’s successfully renegotiation of almost all debt – UZ and GDP warrants remain
UZ’s case is part of Ukraine’s efforts to renegotiate its Eurobond debts – the securities were issued before Russia’s full-scale invasion of Ukraine and became successful among other emerging markets.
The war, however, has created an urgent need to redirect liquidity for defense and recovery.
In summer 2024, Ukraine reached a deal that helped the country ease the debt burden – private creditors and the government reached a compromise to rewrite conditions for $20 billion of debt in Ukraine’s Eurobonds, the country’s sovereign debt.
Apart from Ukraine’s Eurobonds, bonds issued by Ukraine’s state road agency, Ukravtodor, had also been renegotiated under the same terms as the state bonds.
Ukraine’s government is also working on restructuring $3.2 billion in GDP warrants, with payments tied to the country’s economic growth.
Ukraine’s chief debt negotiator Yuriy Butsa told investors in London last week that Kyiv is in no rush to restructure its GDP-linked debt. Ukraine prefers to get the right deal rather than hastily reach an agreement ahead of the upcoming deadline, Reuters wrote based on information from sources.
In April Ukraine’s government failed to agree on new GDP-warrant restructuring terms with their holders, which include Aurelius Capital Management LP and VR Capital Group.
“The GDP warrants were designed for a world that no longer exists,” Minister of Finance of Ukraine Sergii Marchenko is quoted as saying in the press release issued by the government.
Apart from sovereign debt and Ukravtodor, Ukraine’s state-owned electricity transmission system operator Ukrenergo also renegotiated terms for “green bonds” in April. It agreed terms with an ad hoc group representing approximately 40% of bond holders, offering them two options: a bond buyback or a bond swap.
UZ is the only state-owned company left that has not yet reached an agreement.
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