Before approving a proposal to defer payments on eurobonds for two years and to change the terms of issuing GDP warrants, Ukraine has discussed it with a select group of their major owners, including Amia Capital, BlackRock, Fidelity International (FIL) and Gemsstock, the Finance Ministry said.
“Following these discussions, Ukraine received clear signs of support for both the eurobond consent request and changes to the terms of GDP warrants from the aforementioned ownership group,” the ministry said in a press release.
The Ministry of Finance emphasized that it was making this offer to preserve foreign exchange liquidity within the country and reduce the existing $5 billion monthly budget deficit resulting from the war.
The agency pointed out that the Russian invasion of Ukraine poses extraordinary risks to the economic, financial and social situation in the country and its territorial integrity, entails unprecedented liquidity pressure and debt servicing difficulties for the government.
“Finding adequate sources of funding for Ukraine to cover critical defense, social and humanitarian costs, as well as to start planning the country’s post-war reconstruction is a constant challenge,” the Finance Minister stated.
He noted that Ukraine’s initiative to defer payments on eurobonds and change the conditions for GDP warrants complements the announced intention of Ukraine’s international partners within the G7 and the Paris Club of creditors to suspend debt payments for Ukraine until the end of 2023 with the possibility of extending the deferment for another year.
“One of the goals of Ukraine’s public debt management operation is to ensure equal treatment of both official and commercial creditors. In particular, this offer was supported by the G7 and the Paris Club of creditors, as noted in their statement dated July 20, 2022,” Ministry of Finance stressed.
The agency also recalled that since February 24, Ukraine continued to fulfill its debt obligations as a responsible issuer in the international capital markets, despite the catastrophic security, humanitarian, economic situation and financial damage inflicted on Ukraine by the Russian war.
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