The Ukrainian government is negotiating with holders of international bonds to restructure its $20 billion debt and is discussing partial debt forgiveness, states Ukrainian Finance Minister Serhii Marchenko.
It is worth noting that Ukraine agreed to a two-year freeze on payments for its international bonds in the early days of Russia's large-scale invasion in February 2022. Now, Kyiv wants to maintain access to international markets and seeks to negotiate a new deal before the freeze ends in August.
Marchenko said that Ukraine is currently negotiating restructuring with creditors, and this specifically involves partial debt write-offs.
Reuters reports that private bondholders are conducting limited negotiations with the government. This move, which establishes temporary trading restrictions, usually signals significant progress in negotiations. However, data from the International Monetary Fund will not be officially available until the consultation period ends, meaning the likelihood of reaching an agreement during this period is very low.
What preceded this
In July 2022, Ukraine requested a two-year deferment on the repayment of its external debts. By the fall, creditor countries had postponed Ukraine's debt payments until the end of 2023.
In April, Reuters indicated that Ukraine was prepared to send a plan to private bondholders for restructuring its $20 billion debt.