Ministry of Finance sent an updated proposal to the Ad-Hoc Committee of
creditors ("Committee") in order to accelerate negotiations on the
restructuring of sovereign and sovereign-guaranteed debt. This updated proposal
takes into account the recent deterioration of the macroeconomic forecast under
the IMF supported Extended Fund Facility (EFF)
proposal includes significant debt reduction, maturity extensions, and a coupon
structure ensuring Ukraine’s debt burden is sustainable in the medium term,
managing the pressure on Ukraine’s balance of payments and its financing needs.
Furthermore, it proposes a value recovery instrument for debtholders
should the situation significantly and durably improve beyond the projections
of the EFF Program.
Ministry strongly urges the Committee to come to the table immediately to reach
a negotiated solution in the nearest time.
both a liquidity and a solvency problem. Therefore, reprofiling its debt will not be sufficient. A simple debt
extension does not resolve the massive pressure on Ukraine’s financial system
from the debt load, largely placed on the country by the Yanukovych
regime which had borrowed approximately US$40 billion.
international reserves managed by the National Bank of Ukraine cannot be used
to repay sovereign debt and raiding reserves would hinder Ukraine’s return to
financial health. This point was confirmed in the statement of IMF Managing
Director Christine Lagarde of June 12. Therefore,
proposals by the Committee to use US$8 billion of those reserves to repay 40%
of the sovereign debt cannot and will not be accepted. Instead, a debt
reduction is needed, as repayment capacity of Ukraine is limited to its fiscal
Ukraine remains current on its obligations, including the coupon due on the
Eurobond maturing in December 2015.
However, the Ministry notifies creditors within the debt operation that,
unless a negotiated solution is found in the weeks to come, it will be forced
to use the tools available to the Ukrainian Government and provided recently by
our coalition partners in the Parliament in order to maintain and strengthen
the nation’s financial health.
debt operation, the Ministry has, is, and will continue to take all steps
necessary to protect the interests of the Ukrainian people. Ukraine's
leadership remains united and fully committed to this goal.