Ukraine Strikes Deal to Restructure $20 Billion Debt

Ukraine announced on Monday that it has reached a preliminary agreement to restructure $20 billion of its debt, amid an ongoing conflict with Russia that has persisted for two and a half years.

Kyiv has secured an "initial agreement" with a group of international private sector creditors to restructure thirteen tranches of Eurobonds. This move will save the country a total of $11.4 billion over the next three years and $22.75 billion by 2033, according to the Ukrainian Ministry of Finance, as reported by Agence France-Presse (AFP).

Finance Minister Serhiy Marchenko stated, "The released funds will support Ukraine's macro-financial stability, allowing us to finance the most urgent needs to counter the Russian invasion." He noted that the Ukrainian government made "significant efforts to reach this decision" after negotiations with a group representing about a quarter of private sector bondholders.

The group expressed satisfaction in a statement, saying it had reached a "swift and constructive agreement with the Ukrainian government." The statement continued, "We are pleased to have been able to provide significant debt relief to Ukraine, aiding its efforts to regain access to global capital markets and supporting future reconstruction efforts." Prime Minister Denys Shmyhal indicated that the debt restructuring "will release these resources for defense, social spending, and reconstruction."

Since the Russian invasion began in 2022, Ukraine has received international financial assistance but has also had to borrow to secure its defense, maintain public services, pay employee salaries, and ensure care for the displaced.