Ukraine legislation paves way for foreign debt restructuring process

By Caroline Salls

Pittsburgh, Sept. 18 – Ukraine’s minister of finance said the Verkhovna Rada has adopted the legislation necessary to launch a foreign debt restructuring process, according to a news release.

The minister of finance said more than 300 votes were cast for the legislation package. A total of 226 votes were required to pass the legislation.

In the release, the minister of finance said the legislation is “crucial for the stability and economic recovery of our country.”

The minister of finance said a deal reached with a special creditors’ board on the restructuring of Ukraine’s foreign commercial debt is the core element of a plan designed to stabilize the Ukrainian economy and lay ground for a return to growth.

Under that agreement, the principal value of the sovereign debt guaranteed by the Ukrainian state will be reduced by 20%, or $3.6 billion, effective immediately, and the repayment of $11.5 billion will be postponed and completed after 2019.

The postponement will give Ukraine a free-of-charge period of four years to recover its economy and return its gross domestic product to a sustainable growth.

The minister of finance said the reduction of Ukraine’s debt burden will also attract more investments to the country.

The debt restructuring agreement contributes to the restructuring goals set in an extended financing facility between the country and the International Monetary Fund, the release said.

Based on the results of the legislation vote, the Ministry of Finance said it is planning to launch a eurobonds exchange within several days.

© 2015 Prospect News.
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