Tag Archives: Debt restructuring

Ukraine reaches deal with private creditors, but what about that Russian Bond?

By now many of you have surely read about the deal reached by Ukraine and its Franklin Templeton-led group of creditors. In short, the parties agreed to (1) write off 20 percent of Ukraine’s debt, (2) extend repayment dates by four years, (3) increase the coupon payment to 7.75 percent, up from 7.2, and (4) issue the creditors a GDP-linked obligation that will pay out a percentage of annual economic growth above 4 percent after 2021. The agreement has been a long time coming and represents a compromise between the two sides’ earlier negotiating positions: as recently as last month, Ukraine insisted on a 40 percent debt write-off while the main creditors had begrudgingly admitted that they might be willing to stomach a 5% haircut to principal. (If you’re interested in the background of the debt dilemma that Ukraine has been wallowing in for the past year or so, check out FT Alphaville’s series of articles on the saga, penned by the exquisite Joseph Cotterill.)

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