Debt Restructuring: Ukraine says its GDP warrant exchange plan is the best

Amid an escalating debt restructuring dispute, Ukraine has strongly rejected the demands of major hedge funds, stating that its proposal to exchange $3.2 billion in GDP warrants for a new class of bonds is the best “possible solution” for the warring country. This is reported by Bloomberg, writes UNN.

DetailsUkraine’s Ministry of Finance stated that it remains confident in its proposal, launched on Monday, as the best way to fulfill a long-standing commitment and restore public debt sustainability.

Reason for the disputeGDP warrants are complex securities whose payments depend on the pace of Ukraine’s post-war economic recovery. Although they were excluded from the $20 billion debt restructuring last year, Kyiv is now seeking to resolve this issue.

Ukraine completes restructuring and reduces its debt by about $9 billion – Ministry of Finance04.09.24, 14:11 • 37066 views

A group of warrant holders, which includes hedge funds Aurelius Capital Management and VR Capital Group, is demanding more favorable exchange terms. In particular, investors insist on protection against potential further restructuring.

The ad hoc committee of warrant holders stated that no consensus had been reached and urged investors to “await further communication” before agreeing to Ukraine’s terms.

The market experienced fluctuations: sovereign dollar bonds fell, and the price of GDP warrants rose above par value – the highest level since 2021.

Ukraine failed to reach a debt restructuring agreement for $2.6 billion – FT24.04.25, 12:38 • 5544 views