AVELLUM advises on Ukraine’s historic USD20.47 billion debt restructuring

AVELLUM advised the Ministry of Finance of Ukraine in the successful restructuring of Ukraine’s state and state-guaranteed external debt, totalling USD20.47 billion. This significant achievement marks a pivotal step in Ukraine’s ongoing efforts to maintain macroeconomic stability and secure essential resources to fund the country’s defence amidst the ongoing war with russia.

The transaction, in which Rothschild & Co acted as financial advisor and White & Case as international legal counsel to the Ministry of Finance of Ukraine, involved a joint consent solicitation and the exchange of 13 series of Ukraine’s outstanding Eurobonds and state-guaranteed Eurobonds of State Agency for Restoration and Development of Infrastructure into 8 new series of Ukraine’s Eurobonds.

Key highlights of the restructuring include:

• 37% Nominal Haircut: Reducing Ukraine’s debt by over USD8.5 billion;
• Debt Service Savings: Ukraine will save USD11.4 billion in debt payments over the next three years and more than USD22.8 billion by 2033;
• Extended Maturity: The average maturity of the restructured Eurobonds has been extended by approximately four years.

Glib Bondar, senior partner at AVELLUM, commented: “We are honoured to be part of this historic transaction. This restructuring provides a considerable decrease in commercial debt of Ukraine and reiterates Ukraine’s commitment to its fiscal obligations and cooperation with investors despite the ongoing war. The 37% nominal haircut, one of the largest in recent sovereign debt restructurings, reflects the constructive dialogue with bondholders and Ukraine’s dedication to ensuring long-term debt sustainability. We are grateful to the professional teams of the Ministry of Finance of Ukraine as well as all parties involved for this fruitful cooperation.”

Senior partner Glib Bondar led the AVELLUM team with support from managing associates Mariana Veremchuk and Yurii Krasnoliudskyi, associates Andrii Kroshko, Elina Kryhan, Nikita Tipikin-Holovko and Olha Harhola. Partner Anton Zaderyholovа and senior associate Oleksandra Zmazhenko provided support on tax matters of the transaction.