Ukraine is unable to pay its bond owners $4.5B, so it is starting debt restructuring negotiations.

Beginning in August, Ukraine must pay Eurobond holders $4.5B to service its debt. In 2024, Ukraine is scheduled to pay $910M that will be applied to the principle and $3.61B in interest. However, this amount is impossible for the country’s wartime budget, so to postpone these and other payments to external commercial creditors, Ukraine is starting the official process of restructuring its debt payments.

Informally, relevant consultations have been taking place since the fall of last year, said the head of the parliamentary finance committee, Danylo Hetmantsev.

He reminded observers that according to the terms of the issues, Ukraine must obtain consent from the owners who possess at least 66% of the principal amount of the total Eurobond debt that has been issuedand at least 50% of each separate issue, which will be included in the restructuring perimeter (this is about $20B). In 2022, Ukraine received consent from 75% of holders of Eurobonds at their nominal value.

“Negotiations under the IMF umbrella should be completed by August“, Hetmantsev added.