Rothschild assists in Ukraine clinch debt reformation


(MENAFN) Ukraine's recent agreement with its bondholders regarding a substantial debt restructuring was significantly influenced by the efforts of Rothschild & Co., according to a report by Reuters. Since being appointed as an advisor to Ukraine’s Finance Ministry in 2017, Rothschild has played a critical role in guiding the country through its financial challenges.

Last week, Ukrainian officials announced that they had successfully reached an agreement with a consortium of foreign investors to restructure approximately USD20 billion in debt. Key players in this bondholder group include prominent US financial firms such as BlackRock and Pimco, as well as French asset manager Amundi. The negotiations gained traction after these bondholders implemented a two-year debt freeze in February 2022, coinciding with the onset of the conflict with Russia.

The bondholders' committee, which represents 25percent of the total bondholders, has consented to absorb significant losses, agreeing to a write-off of 37percent —equivalent to USD8.7 billion—on the nominal value of their debt. This decision underscores the willingness of international investors to support Ukraine during its ongoing crisis.

Furthermore, the International Monetary Fund (IMF) has indicated that this restructuring aligns with the parameters of its USD122 billion aid package to Ukraine. Both the IMF and Ukraine's major creditors, which include the United States and the Paris Club, have approved the restructuring terms, which were made public through a statement on the London Stock Exchange.

The implications of this restructuring are considerable; it is projected to save Ukraine approximately USD11.4 billion over the next three years. This financial relief is deemed essential not only for sustaining Ukraine’s defense efforts but also for adhering to the stipulations of the IMF program. The scale and speed of this debt restructuring have been noted as one of the largest and most rapid in recent history, second only to similar measures taken by Argentina and Greece.

As Ukraine continues to navigate its complex economic landscape amidst ongoing challenges, this restructuring agreement represents a pivotal step in stabilizing its finances and securing vital international support.

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