Jaresko outlines plan to avoid default

The minister recalled that the government had made an important step to complete the restructuring of Ukraine's sovereign and sovereign-guaranteed eurobonds. The government approved the issue terms for new bonds which will be given to the country's sovereign creditors in exchange for the previous ones.

"With this, we will finally complete all procedures for the restructuring of our debt - the largest part of our restructuring efforts - and turn this complicated page in our economic history. This will allow us to avoid the threat of default, which we were on the brink of," Jaresko wrote.

Read alsoMinister Jaresko announces UAH 24.1/$ as average forex rate in 2016According to the minister, the restructuring agreement will help reduce the pressure on currency reserves of Ukraine (worth billions of dollars), giving the Ukrainian currency and banking system more stability.

"All in all, this restructuring is another important step towards economic stability and the return to growth," the minister noted. 

Jaresko noted that negotiations on restructuring Ukraine's international commercial debt lasted eight months and almost no one believed Ukraine would get to this point.

"The negotiations were long and tough. But eventually we got there. We reached an agreement with our creditors and thus saved $3 billion for Ukraine straight away and postponed payments of a further $8.5 billion until after 2018," she noted.

Read alsoJaresko expects financial support for Ukraine to be doubled "We also agreed with our creditors to issue public derivatives – new tools providing benefits for the creditors for agreeing such a difficult deal which gives us all an incentive for Ukraine's strong economic growth," the minister wrote.

There is still a series of negotiations ahead on the loans of state-owned enterprises which were previously guaranteed by the state, according to the minister.

As UNIAN reported earlier, yesterday, November 11, the Cabinet of Ministers approved the terms of the issue of new eurobonds and derivatives to finalize the ongoing state debt restructuring process. 

According to the Cabinet, the new eurobonds will be issued in nine separate series to different amounts, but at a single interest rate set at 7.75% per annum. The derivatives will be issued to a conditional amount of $2.9 billion, and payments on them will be effected only if Ukraine achieves certain positive macroeconomic indicators.

The so-called "Russian" bonds, which were issued in December 2013 and are falling due in 2015, were not included into the list of the restructured eurobonds that are subject to exchange for the new bonds.

As UNIAN reported earlier, on August 27, the Ukrainian government reached an agreement with the creditors' ad hoc committee on restructuring part of the public debt totaling $18 billion.

Later, on October 14, a meeting was held in London, during which more than 75% of the holders of Ukraine's eurobonds to be restructured agreed to the general terms of the restructuring of Ukraine's debt.