Ukraine fails to reach a deal with investors to restructure $ 2.6 billion in debt

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Ukraine said on Thursday that it had failed to reach a deal with $ 2.6 billion holders of its debt, in a blow to its hopes of obtaining a restructuring before the deadline for payment next month.

The country’s Ministry of Finance said it “will look at all available options” to restructure and continue negotiations after the failure of the opening of talks in Washington this week with a group of holders of the so -called GDP match.

last month International Monetary Fund He said, “If you leave without treatment,” the orders of “an important risk” to sustain debt even after a $ 15.5 billion rescue plan by the fund and restructuring more than $ 20 billion in bonds last year.

Reconstruction orders were excluded last year, given their complexity, but Kyiv needs to connect a deal on them to avoid billions of dollars flowing from its financial resources in the coming years.

Payments are related to Ukraine’s annual economic growth orders, which can thrive strongly in the event of a ceasefire with Russia.

KYIV will have to decide whether to fail to pay nearly $ 600 million due at the end of May, associated with the performance of the economy in 2023, if he cannot reach a deal to restructure before that.

Prices fell on the orders of GDP by 2 cents to 71 cents on the dollar on Thursday, after it rose to up to 88 cents earlier this year on bets on a quick peace deal that would enhance growth.

Orders were issued as part of a previous restructuring of Ukrainian debts in 2015 and were designed to encourage creditors to support the country by giving them a share of any aspect for its economy.

However, they became controversial in the widespread invasion of Russia in 2022 because Kiev-along with its Western supporters-refrained from seeing the flow of its money for private investors where the economy recovers from Nader in War time.

The payment orders provide their holders if the Ukrainian annual growth exceeds 3 percent, but Kyiv has argued that they are outdated given the damage to the economy due to the conflict.

The Ministry of Finance in Ukraine said on Thursday: “The orders of the gross domestic product of a world no longer exist.” “The modest economic growth in Ukraine in 2023 was not a sign of increased prosperity, but rather a fragile recovery from the contraction of about 30 percent due to the full invasion of Russia.”

The talks this week were with members of a committee of their holders of the task that includes VR Capital and Aurelius Capital Management. Ukraine Discussions will also be held with other holders of orders.

The committee said on Thursday that the suggestion of Ukraine “has no possibility of approval by a majority required from the holders of notes and is not a basis for a viable point of participation with the owners of detention.”

In this week’s talks, Ukraine made investors the option to switch all their orders to a greater amount of bonds from restructuring last year, according to a presentation issued by Ukraine on Thursday. These bonds, which are currently circulating by about 50 cents in dollars, also have a top head based on GDP growth, and will be pushed more after 2028 if the GDP growth in Ukraine beats IMF goals by that time.

The government also provided investors an alternative deal that would maintain notes, but cancel payments for GDP growth between 2023 and 2026. This option will also give KyIV to further flexibility in re -orders in the future, in exchange for investors invested an additional amount of bonds that have been restructured by a third of their units.

The guarantee holders said on Thursday that a group of warranty holders in this week’s talks offered to restructure the payment scheduled next month, by accepting a quarter of the amount in the bonds-it will receive a maturity of 2029 and 7.75 percent of the voucher-instead of taking cash.

Such conditions would make their bonds more valuable than other bonds that have been restructured in Ukraine, which crowned their payments at a lower level until later in the contract.

Tames were included in a two -year paid comment, Ukraine agreed with bond holders after the invasion of Russia. KYIV paid about 200 million dollars on last year’s orders when this suspension ended, in part so that it can keep the option to rebuild orders in the future.

The Security Owners Committee said on Thursday that “the sentence of wholesale sales of the obligations is not appropriate or necessary,” in part, due to the option of re -purchase, which will allow Ukraine to pay $ 2.6 billion to retire from debt, instead of paying 6.6 billion dollars expected in the future.

The GDP in Ukraine has grown more than 5 percent in 2023. Payments were crowned orders currently 0.5 percent of GDP in Ukraine. This cover will finally end, giving Kyiv more incentives to restructure payments.

Ukraine unilaterally agreed to a temporary suspension of payments on last year’s orders, which will include the amount due on May 31. But any hidden payments will accumulate with this by 7.75 percent a year.