Lenders agreed to freeze Ukraine’s foreign debt payments

The total volume of Ukraine's external debt is $19.6 billion. The US and the IMF supported the restructuring process, as the country needs funds for social payments and defense spending, writes Bloomberg

Ukraine's creditors, which account for about 75% of foreign bonds, have agreed to freeze payments until 2024. It is reported by “Interfax-Ukraine” with reference to the document of the Ukrainian Ministry of Finance.

“In the aggregate, Ukraine received and accepted consents for approximately 75% of the total nominal value of securities in circulation”,— The document says.

The approved changes regarding the terms of Eurobond issues should come into force on August 11, the agency writes.

According to Bloomberg, citing the Ministry of Finance of Ukraine, Ukraine's total external debt is $19, 6 billion

The restructuring process was supported by key allies of Ukraine— The United States and the International Monetary Fund (IMF), as the country needs funds for social transfers and defense spending.

This will save Kyiv $5.8 billion, the agency writes. According to Bloomberg, Ukraine's budget deficit is about $5 billion a month.

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“Thanks to the solidarity with Ukraine shown by the private investor community along with the official public sector, we will be able to meet the needs of the country's state budget in wartime,” — said Finance Minister Sergei Marchenko (quoted by Reuters).

Earlier, on July 23, the international rating agency Fitch downgraded Ukraine's long-term issuer default rating (IDR) in foreign currency from CCC to C amid Kyiv's desire to restructure external public debt .

On July 19, Ukraine asked private foreign creditors to defer payments on external obligations for two years. The next day it became known that a group of creditors, which includes Canada, France, Germany, Japan, the United Kingdom and the United States, agreed to give Kyiv a delay from August 1 to the end of 2023 with the possibility of an extension for a year. This was considered by Fitch to be “the beginning of a process similar to a default.”

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