Two-year debt freeze from foreign creditors to help Ukraine maintain macro-financial stability - PM
MOSCOW. Aug 11 (Interfax) - Ukrainian Prime Minister Denys Shmyhal has thanked foreign investors for their decision to defer payments on Ukraine's foreign debt until 2024.
"Investors in Ukraine's foreign debt agreed to postpone payments until 2024, with a possible extension for another year. Thank you for the step of solidarity. We are also grateful to the G7 countries for supporting this position," Shmyhal said on social media on Wednesday, according to Ukrainian media outlets.
This decision will allow Ukraine to save almost $6 billion, the prime minister said.
"These funds will help us maintain macro-financial stability, strengthen the stability of the Ukrainian economy," he said.
The holders of the Eurobonds issued by Ukrenergo and Ukravtodor have also agreed to defer payments, Shmyhal said, adding that it will help Ukraine better prepare "for the most difficult heating season in its history and restore infrastructure more efficiently."
Ukravtodor issued $700 million in 6.25% bonds maturing 2028 backed by state guarantee, and Ukrenergo $825 million in 6.875% bonds.
Ukraine on July 20 asked international bond holders to freeze all payments and current interest rates on them for two years starting on August 1. Interest on the bonds can be paid immediately after the two years are up or capitalized.
The Ukrainian Finance Ministry said on August 10 that Ukraine had received the necessary consent to those terms from bond holders. It said Ukraine had 13 international bond issues outstanding worth $17.26 billion and EUR 2.25 billion at face value.
Ukraine was due to redeem three bond issues totaling $3.02 billion by July 2024, including $912.35 million by September 1, 2022, $1.36 billion by September 1, 2023 and $750 million by February 1, 2024. Interest on these and the 10 other issues will be around $3 billion over the 24 months, at current exchange rates.
Consent has also been received to defer payments for two years, as well as for changes to the terms of GDP-linked warrants, the Finance Ministry said.
