Ukraine to skip $665 million debt payment, Bloomberg reports
Ukraine will skip a $665 million government debt payment after failing to agree on restructuring terms with creditors, Bloomberg reported on May 30.
"Ukraine remains committed to implementing a comprehensive, fair and equitable restructuring of the GDP-linked securities," the Finance Ministry told Bloomberg.
On April 24, the Ukrainian government said it failed to reach an agreement with its debtholders to restructure approximately $2.6 billion of debt. This indicated Kyiv could default on its latest payment.
The debt consists of so-called GDP warrants, a financial instrument that gives the debtholder the right to additional payments based on economic performance.
Ukraine has said it will seek to abide by its agreements with the International Monetary Fund (IMF) and official partners, Bloomberg reported.
The IMF has warned that failure to resolve the GDP warrant issue could threaten further debt restructuring, as well as an ongoing $15.6 billion bailout program, the Extended Fund Facility (EFF).
Kyiv reached an agreement with some of its creditors in July 2024 to restructure more than $20 billion in international bonds, allowing Ukraine to avoid default amid Russia's full-scale war.
In September, the Finance Ministry announced it had reduced state debt by $9 billion after completing an external debt restructuring process.
Ukraine's economy has struggled in the face of Russia's war. Its GDP fell drastically in the early days of Russia's full-scale invasion and has steadily grown since.
The European Bank for Development and Reconstruction (EBRD) forecasts Ukraine's GDP will grow 3.3% in 2025, down from an initial forecast expecting growth of 3.5%.
The Kyiv Independent news desk
