Restructuring details announced

Restructuring details announced



16 березня 2015 года
ICU

Last Friday, the MoF presented the new EFF program from the IMF via a webinar and provided some guidance about the current debt restructuring under negotiation. According to the MoF, the government anticipates saving US$15.3bn in public sector financing during the EFF program by restructuring sovereign and guaranteed debt (UKRINF Eurobonds, City of Kyiv Eurobonds, Ukravtodor, Yuzhnoe and Ukrmedpostach loans) and promoting separate restructurings at Oschadbank, Ukreximbank and Ukrzaliznytsia. The MoF proposes similar restructurings for both sovereign and guaranteed debt with the possibility of reducing the principal. The MoF's second goal is to decrease the debt-to-GDP ratio to 71% by 2020.

Investment implications: If Russia agrees to this restructuring, total debt included in the restructuring could increase up to US$20bn, at least half of which is currently scheduled for repayment over the next four years. The MoF most likely will request an extension of the maturities, a principal haircut, and a reduction of the coupon rates to decrease interest repayments on the newly issued debt. Quasi-sovereign issues not included in this offering most likely will be restructured separately and most likely under similar conditions. As the MoF intends to decrease the debt-to-GDP ratio over the next five years, a principal reduction appears to be necessary to meet this target. At the same time, the MoF provided no other details as to the next steps which will be discussed privately with debt holders.

Источник: ICU

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