Ukraine is pleased to announce that bondholders of all outstanding sovereign and guaranteed Ukravtodor Eurobonds, totalling USD 20.47 billion, have overwhelmingly voted in favour of the proposed restructuring of the country’s external commercial state and state-guaranteed debt. This landmark decision marks a decisive milestone in Ukraine’s ongoing efforts to preserve macroeconomic stability, ensure debt sustainability, and conserve resources vital for funding the country’s defence against russia’s full-scale invasion.

Following a comprehensive and collaborative negotiation process with bondholders, 97.38% of the bondholders have endorsed the restructuring deal, exceeding the required threshold of two-thirds. Each series of outstanding Eurobonds received over 95% of votes in favour from the bondholders, significantly exceeding the minimum required 50% for the restructuring agreement to take effect and enable the proposed exchange of 100% of the outstanding Eurobonds for the new ones. This strong level of support reflects the international financial community’s involvement in ensuring Ukraine’s financial resilience in the face of russia’s full-scale invasion.

This restructuring allows for an upfront nominal haircut of 37%, reducing the debt stock by more than USD 8.5 bn, a reduction in debt service payments by USD 11.4 bn over the IMF programme period (over 90% reduction) and by USD 22.75 bn until 2033 (over 75% reduction), an extension of the weighted average maturity of Eurobonds by close to 4 years, on top of the 2022 2-year extension.

This restructuring, executed in less than 5 months despite the inherent complexities due to the situation in the country and one of the highest number series and principal amount of Eurobonds in recent history, achieved the largest present value haircut for a Sovereign since 2012 and creates the first contingent instrument approved under the IMF’s Sovereign Risk and Debt Sustainability Framework methodology.

Sergii Marchenko, the Minister of Finance of Ukraine, commented on the voting results: “We are proud to announce that bondholders have voted overwhelmingly in favour of our consent solicitation with support from 97% of bondholders. This allows Ukraine’s restructuring to be implemented for the entirety of the Sovereign Eurobonds and Ukravtodor Guaranteed Eurobonds. This near-unanimous level of support was achieved in less than 5 months, allowing Ukraine to reach a deal before the expiration of the 2-year payment freeze, as agreed in 2022. This was achieved on such a short timeframe thanks to hard work and consistent good-faith engagement with our investors and international partners

Finalising the Eurobond debt restructuring deal is a crucial step to ensure Ukraine maintains the budget stability needed to continue financing our defence during a martial law. This is an important step on Ukraine’s path to restoring long-term economic stability and will enable our swifter re-entry to international markets once the security situation improves.

This agreement will reduce Ukraine’s debt stock to a sustainable level while meeting the targets of the IMF-supported programme and is in line with the expectations of our international partners, the Group of Creditors of Ukraine.

I would like to express my gratitude to the bondholders for constructive engagement throughout this process, and to the IMF and our bilateral partners for their support as we worked to find a solution that would be satisfactory to all parties. As we get closer to closing this chapter, we remain committed to ensuring our economy remains strong, to support and fund our defence against russia’s aggression and lay the foundations for our future recovery and reconstruction.”

With the positive outcome of the vote launched on August 9 and expiring on August 27, the restructuring process will now proceed to the settlement phase. The settlement date is expected on August 30.