Ukraine seems to restructure its debts without a moratorium on debt payments / Photo from uapress.info
Swedish economist and Senior Fellow at the Atlantic Council Anders Aslund says that Ukraine is close to its debt restructuring deal with a possible 20% haircut.
"Ukraine is getting closer to debt restructuring deal. Rumor: 20% haircut. Seems no moratorium needed. Proably ok," he tweeted, citing an article published in the Wall Street Journal.
"Ukraine's government is nearing a restructuring deal with its creditors that would call for a 20% reduction in the value of the country's bonds, marking a possible breakthrough in negotiations that have been deadlocked for months, according to people familiar with the matter," reads the article titled "Ukraine's Government Nearing Deal on Debt Restructuring," published on August 24.
As UNIAN reported earlier, Ukraine has been conducting negotiations with the creditors on sovereign debt restructuring since March 2015, discussing extension of maturities and write-off of part of the debt's nominal value. The measures aim at saving $5.2 billion in debt repayment in 2015 and up to $15.3 billion in the next four years.
After several months of negotiations, state-run Ukreximbank and Oschadbank have recently agreed with holders of their 2015-2018 loan participation notes worth $1.5 billion and $1.3 billion, respectively, on the re-profiling of the debts. Principal debt repayment was postponed by seven years in exchange to an increase in coupon rates without writing off principal debt.
In June, Ukrainian Finance Minister Natalie Jaresko stated that if there were no progress in talks with the creditors, Ukraine would "theoretically" be in a position to declare a moratorium on sovereign debt repayment in late July, with such right being provided by a law, which came in force on June 17.
Later, Ukrainian officials and the ad hoc creditors' committee issued a joint statement reporting significant progress made in the negotiations and reaching confidentiality arrangements.
On July 24, the Ukrainian Finance Ministry effected $120 million interest payment that came due on that day.
On August 4, the Finance Ministry sent a revised proposal on the sovereign and sovereign guaranteed debt to the ad hoc creditors' committee, calling them to participate in a high-level meeting in London on August 6. However, the creditors who had previously agreed to write off 5% of the face value of Ukraine's sovereign debt asked to put off the meeting and talks have been under way until August 24.