Monday 26 September 2016

Ukraine reaches debt relief deal with creditors

Published 27/08/2015 | 11:29

Ukraine has reached a debt relief deal with its creditors
Ukraine has reached a debt relief deal with its creditors

Ukraine has reached a crucial deal with its international bondholders that will help prop up its government finances and keep the struggling country from defaulting on its debt.

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Prime Minister Arseniy Yatsenyuk announced the value of Ukraine's 19 billion US dollar sovereign debt will be cut by 20% to 15.5 billion dollars.

A statement released by the finance ministry said the deal would also extend the payment period on the government bonds by four years to 2027.

Kiev hailed the agreement as a "critical step towards macroeconomic stability, creating a healthy economy and attracting international investment".

Under the deal, Ukraine's repayments on its bonds will depend on how quickly the economy, battered by a separatist war in the east, grows. Ukraine will pay nothing on its bonds if its economy grows less than 3% annually.

The deal is a "win-win, creating a virtuous economic circle for Ukraine and its international commercial creditors who also have a vested interest in seeing Ukraine's economy thrive", the ministry said in the statement.

Press Association

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