AVELLUM advises Ukrenergo and the Ministry of Finance of Ukraine on restructuring of US$825 million Eurobonds

AVELLUM is proud to announce its role as the Ukrainian legal counsel to National Power Company “Ukrenergo” (“Ukrenergo”) and the Ministry of Finance of Ukraine on the restructuring of Ukrenergo’s US$825 million 6.875% guaranteed green and sustainability-linked notes due 2028 (“Eurobonds”). The transaction, a first-of-its-kind debt-for-energy swap, frees up around US$135 million for Ukraine’s power grid, which continues to operate under constant attack.

Noteholders Back Deal Almost Unanimously

The terms of the restructuring were built on an agreement in principle reached with an ad hoc group of noteholders in April 2025 and revised in April 2026. Launched on 28 August 2026, the transaction offered each noteholder a choice: sell its Eurobonds for cash through an unmodified Dutch auction or exchange them for unguaranteed new notes.

With nearly all noteholders on board, the extraordinary resolution was passed on 1 October 2026, and the deal settled in two weeks later. As a result, participating noteholders amounting to 97.49% received a combination of cash and US$395 million 8.5% unguaranteed new notes due 2031 issued by Ukrenergo, while non-participating holders received cash consideration.

Backed by US and Ukraine Support

The cash portion came from new long-term financing with the support of the United States International Development Finance Corporation (“DFC”). Mavka Finance DAC placed US$494.75 million 8.6% secured reconstruction notes due 2041, with investors benefiting from the credit enhancement provided by DFC political risk insurance, as well as Ukraine’s sovereign guarantee. The notes carry an Aa3 rating from Moody’s, and their proceeds funded the payments to the noteholders of the Eurobonds.

“Restructuring the debt of a state-owned company in the middle of a war is never routine. Its successful completion is yet another signal of the continued support and the confidence of international partners in the long-term prospects of Ukraine’s energy sector. Every element, from the offer terms to the DFC- and Ukraine-backed financing, had to fit together precisely and the near-unanimous response from noteholders speaks for itself. We are proud to assist Ukrenergo turning a complex restructuring into resources for rebuilding Ukraine’s power grid”, – commented Glib Bondar, senior partner at AVELLUM.

AVELLUM team was led by senior partner Glib Bondar with help of managing associate Mariana Pylypenko and senior associate Andrii Kroshko. Other members of the project team included of-counsel Yurii Krasnoliudskiy, associates Nikita Tipikin-Holovko and Elina Kryhan. Partner Anton Zaderyholova and senior associate Anna Sokur advised on the tax aspects and counsel Olena Sichkovska-Chornobyl on the energy aspects of the transaction.