Ukraine Strikes Preliminary $20 Billion Debt Restructuring Deal
Ukraine said Monday that it had struck a preliminary deal with a group of international private creditors to restructure more than $20 billion of the debt it owes them, a step that would save the war-torn country billions and preserve funds to support its battered armed forces.
The creditors agreed to write off more than a third of the nominal value of the government bonds they hold, which would allow Ukraine to save $11.4 billion over the next three years, the Ukrainian government said. The deal has been approved by the International Monetary Fund, which has made its financial assistance to Ukraine conditional on the country’s ability to reduce its debt.
Denys Shmyhal, Ukraine’s prime minister, said in a statement that the deal “allows us to free up resources for our defense, social spending and reconstruction.”
The deal was signed with the largest group of creditors, representing about a quarter of private bondholders. Two-thirds of all bondholders must approve the agreement for it to take effect. Olena Bilan, chief economist at the Kyiv-based investment firm Dragon Capital, said “chances are high” that the deal will be approved because of a series of incentives for those bondholders who sign on, such as additional fees.
The government also announced Monday that Dmytro Kuleba, the foreign minister, would be visiting China for three days from Tuesday to hold talks on stopping the Russian invasion and reaching a peace deal. It is Mr. Kuleba’s first trip to China since the war started in 2022, signaling Kyiv’s desire to involve Beijing in peace talks that the Chinese government has so far largely snubbed.
China declined to send top officials to a Ukrainian-held peace summit in Switzerland last month that did not manage to rally support from key regional powers such as Brazil and Saudi Arabia. President Volodymyr Zelensky accused China then of “working hard today to prevent countries from coming to the peace summit,” a comment that angered Beijing.
