The Ministry of Finance of Ukraine is pleased to announce the
settlement of Ukraine’s debt restructuring operation in respect of
thirteen series of sovereign and sovereign guaranteed Eurobonds. Following the
passage of Extraordinary Resolutions for each of these series of Eurobonds at
bondholder meetings held on 14 October, the holders of such Eurobonds who
submitted valid and timely participation instructions are today receiving
distributions of new Ukrainian securities in accordance with the terms of the exchange
offer.
Minister of Finance of Ukraine Natalie Jaresko said: “Today, we
close one important chapter in Ukraine’s economic history and open
another. Few thought we would get to this point when we launched this process
eight months ago. The successful conclusion of our debt restructuring process,
completed while avoiding default, leaves Ukraine’s economy in a much
stronger position and is an important prerequisite for our return to growth.”
Settlement of the exchange offer involves the restructuring of c.US$15
billion of Ukraine’s external debt, achieves a 20% debt reduction for Ukraine
(c.US$3 billion) and allows Ukraine to avoid paying any of the previously
scheduled US$8.5 billion of principal falling due under such bonds through the
end of 2018. This successful debt operation is a key part of the implementation
of Ukraine’s IMF-supported EFF Program approved in March 2015, and represents
the outcome of seven months of intensive work of all Ukrainian authorities,
coordinated by the Ministry of Finance, to convince Ukraine's bondholders of
the necessity of a debt restructuring.
Holders of the thirteen series of bonds which approved their respective
Extraordinary Resolutions who submitted valid and timely participation
instructions before the voting deadline are today being distributed new
securities through the clearing systems in connection with settlement.
Specifically, they are being distributed new sovereign notes carrying a coupon
of 7.75% and maturing between 2019 and 2027, as well as GDP-linked securities,
all as provided in the terms of the exchange offer. Holders will receive their
entitlements through the clearing systems and their respective custodians in
accordance with the procedures of such clearing systems and custodians in due
course.
Holders of the thirteen series of bonds which approved their respective
Extraordinary Resolutions who did not submit valid and timely participation
instructions before the voting deadline are not receiving new securities today.
Instead, such holders will have 150 days after the settlement date to submit
valid participation instructions in accordance with the published terms of the
exchange offer if they wish to receive their entitlement to new Ukrainian
securities. Any holders who have not submitted valid participation instructions
within such period will lose their entitlement to receive the new securities.
Instead the securities to which they would otherwise have been entitled will be
sold in the market and the cash proceeds of sale (net of selling expenses) will
be distributed to such holders through the clearing systems.
Only one series of eligible debt instruments did not participate in the
exchange offer, being the Eurobond maturing in December 2015. The terms of the
new sovereign notes issued today include contractual provisions which prevent Ukraine from
paying such Eurobond in accordance with its terms or settling with the holders
of such Eurobond on terms more favourable than those received by
participating bondholders in the just-completed exchange offer. Ukraine regrets
that that holders of such Eurobond have decided not to support Ukraine’s
essential debt operation, but within the contractual constraints in which it
must operate the government of Ukraine remains open to finding a solution with
the holders of the December 2015 Eurobond.
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