Ukraine unable to agree to restructuring deal with GDP-linked debt holders
Ukraine’s proposal said to have ‘no prospect of approval or form the basis for a viable point of engagement’
24 April 2025 - 16:07
byMarc Jones
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London — Ukraine’s government said on Thursday that it had not been able to agree to a deal with holders of its GDP-linked warrants to restructure the bond-like debt instruments, though it did intend to continue talking with them.
“Ukraine indicated that it could not accept the restricted (GDP Warrant) holders’ proposal and declined to make any further proposal,” the government said in a statement.
The debt holders hit back, saying the proposal Ukraine had put forward had “no prospect of approval” and did not “form the basis for a viable point of engagement”.
They too said they were willing to continue dialogue with Ukraine and laid out their rejected proposal for the next payment due on the debt — Ukraine paying $406m in cash plus $209 in the form of new bonds.
Kyiv said that it intended to “continue engagement” with the debtholders, and would consider “all available options” to restructure the debt, which is a stipulation of its IMF programme.
Ukraine threw in the $2.6bn worth of GDP warrants — fixed income securities indexed to economic growth — to sweeten its 2015 debt restructuring after Russia’s annexation of Crimea.
But their complex structure meant they had not been part of last year’s broader $20bn restructuring that became necessary after Moscow’s full-scale invasion in 2022.
It had been in talks with a group of warrant holders ahead of the next scheduled payout of the instruments of just over $500m at the start of June. It also comes as Kyiv faces mounting pressure from US President Donald Trump to agree to a ceasefire deal.
“The GDP warrants were designed for a world that no longer exists,” Ukraine’s finance minister Sergii Marchenko said in a statement after the breakdown of talks.
He said that the modest rebound in Ukraine’s economy over the last couple of years had done little to mend the near 30% slump caused by Russia’s invasion in early 2022.
“These financial instruments must not become an obstacle to our recovery,” Marchenko said.
The initial market reaction saw the GDP-linked debt, which is denominated in dollars, fall more than 2 cents to just over 70 cents on the dollar — or a 30% discount to its face value.
It had recovered roughly half of that drop however by the middle of European trading, to stand at nearly 71.5 cents.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Ukraine unable to agree to restructuring deal with GDP-linked debt holders
Ukraine’s proposal said to have ‘no prospect of approval or form the basis for a viable point of engagement’
London — Ukraine’s government said on Thursday that it had not been able to agree to a deal with holders of its GDP-linked warrants to restructure the bond-like debt instruments, though it did intend to continue talking with them.
“Ukraine indicated that it could not accept the restricted (GDP Warrant) holders’ proposal and declined to make any further proposal,” the government said in a statement.
The debt holders hit back, saying the proposal Ukraine had put forward had “no prospect of approval” and did not “form the basis for a viable point of engagement”.
They too said they were willing to continue dialogue with Ukraine and laid out their rejected proposal for the next payment due on the debt — Ukraine paying $406m in cash plus $209 in the form of new bonds.
Kyiv said that it intended to “continue engagement” with the debtholders, and would consider “all available options” to restructure the debt, which is a stipulation of its IMF programme.
Ukraine threw in the $2.6bn worth of GDP warrants — fixed income securities indexed to economic growth — to sweeten its 2015 debt restructuring after Russia’s annexation of Crimea.
But their complex structure meant they had not been part of last year’s broader $20bn restructuring that became necessary after Moscow’s full-scale invasion in 2022.
It had been in talks with a group of warrant holders ahead of the next scheduled payout of the instruments of just over $500m at the start of June. It also comes as Kyiv faces mounting pressure from US President Donald Trump to agree to a ceasefire deal.
“The GDP warrants were designed for a world that no longer exists,” Ukraine’s finance minister Sergii Marchenko said in a statement after the breakdown of talks.
He said that the modest rebound in Ukraine’s economy over the last couple of years had done little to mend the near 30% slump caused by Russia’s invasion in early 2022.
“These financial instruments must not become an obstacle to our recovery,” Marchenko said.
The initial market reaction saw the GDP-linked debt, which is denominated in dollars, fall more than 2 cents to just over 70 cents on the dollar — or a 30% discount to its face value.
It had recovered roughly half of that drop however by the middle of European trading, to stand at nearly 71.5 cents.
Reuters
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