we see the ultimate solution to be a significant maturity extension of Ukraine’s sovereign Eurobonds, some decrease in their coupon rate and some tiny haircut.

Concorde Capital Research: Ukraine, creditors agree to conclude debt operation ASAP

July 02, 2015 - Cbonds

The Ukrainian Finance Ministry released a joint statement with the ad hoc creditors committee on the evening of June 1 indicating progress in the negotiations on the parameters of the debt operation. They agreed upon confidentiality arrangements that “will allow principal-to-principal negotiations on the substance of a possible solution to start next week,” the release said. “The parties have agreed to enter such negotiations in good faith ... and with the objective of concluding an agreement on the terms of the debt operation as soon as possible.”

Launched in March, the debt operation aims to restructure USD 23.4 bln in debt of the government and state entities to private creditors and thus far, preliminary agreements have been reached for restructuring USD 2.7 bln in Eurobonds of state banks. The USD 20.1 bln in state and guaranteed debt is subject to maturity extension, a decrease of interest and a haircut, according to the MinFin plan.

Alexander Paraschiy: Our view that the parties might have gotten closer to a solution is right on target. Now the risk that Ukraine will have to use its trump card in the talks – imposing a debt moratorium – has significantly decreased. At this stage, we see the ultimate solution to be a significant maturity extension of Ukraine’s sovereign Eurobonds, some decrease in their coupon rate and some tiny haircut.

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