{"id":42946,"date":"2022-07-21T11:18:47","date_gmt":"2022-07-21T08:18:47","guid":{"rendered":"https:\/\/www.ukrgate.com\/eng\/?p=42946"},"modified":"2022-07-21T11:18:51","modified_gmt":"2022-07-21T08:18:51","slug":"holders-of-eurobonds-must-decide-on-kyivs-request-to-freeze-payments-by-august-9-reuters","status":"publish","type":"post","link":"https:\/\/www.ukrgate.com\/eng\/?p=42946","title":{"rendered":"Holders of Eurobonds must decide on Kyiv’s request to freeze payments by August 9 – Reuters"},"content":{"rendered":"\n

\u00a0<\/strong>Creditors must vote on Ukraine’s proposal to freeze payments on its Eurobonds for two years by August 9, <\/p>\n\n\n\n

KYIV. UkraineGate . 21. \u00a0July . 2022 | Economy .<\/strong><\/p>\n\n\n\n

Details<\/strong><\/p>\n\n\n\n

The bondholders received the issuer’s formal consent to change some of the terms of the bond contracts. Ukraine’s Ministry of Finance held a conference call with creditors to explain the details of the proposal and broader issues on Wednesday, July 20.<\/p>\n\n\n\n

Lenders have until August 9 to vote on the proposal, and the results are to be published the next day, the newspaper writes.<\/p>\n\n\n\n

Official creditors have already\u00a0declared\u00a0that they agree to suspend payments to them and called on bondholders to accept the country’s request for a freeze.<\/p>\n\n\n\n

Last week, the Ukrainian state-owned energy company Naftogaz demanded that its creditors freeze debt payments for two years. The proposal has angered creditors who believe the freeze periods are too long.<\/p>\n\n\n\n

“It is unclear whether this (sovereign) proposal will be widely accepted by creditors, creditors may fight back to reduce the payment freeze,” said one lender.<\/p>\n\n\n\n

What are the consequences of a debt freeze<\/strong><\/p>\n\n\n\n

A moratorium on payments would instantly free up money for military spending. The finance ministry said it would help “mitigate the current $5 billion monthly budget deficit” as the country would not have to tap into its international reserves to repay hard-currency bonds in a difficult financial situation.<\/p>\n\n\n\n

“Most people have been expecting Ukraine to default since the invasion, and this crystallization makes sense from a stalling point of view,” said Stuart Culverhouse, chief economist at London-based Tellimer.<\/p>\n\n\n\n

Ukraine’s proposal is to stop servicing the debt, but the question remains as to how Kyiv will repay these sovereign bonds in the future. The next stage may be debt restructuring, the publication notes.<\/p>\n\n\n\n

The government and foreign lenders will negotiate and eventually agree to new terms for the bonds, which could include maturity extensions, reductions, or a combination of the two.<\/p>\n\n\n\n

The last time Ukraine restructured its sovereign bonds was in 2015.<\/p>\n\n\n\n

Who are the creditors?<\/strong><\/p>\n\n\n\n

Government bonds of Ukraine are owned by large fund managers.<\/p>\n\n\n\n

Data compiled by EMAXX shows that the world’s largest asset manager BlackRock owns $1.2 billion in various funds in the US and UK, while Alliance Bernstein owns $580 million and Eaton Vance and PIMCO hold more than $300 million in bonds dollars<\/p>\n\n\n\n

BlackRock declined to comment on PIMCO, Eaton Vance and Alliance Bernstein did not immediately respond to a request for comment.<\/p>\n\n\n\n

Addition<\/strong><\/p>\n\n\n\n

According to the World Bank, at the end of 2020, the outstanding foreign debt of Ukraine amounted to 130 billion dollars.<\/p>\n\n\n\n

Ukraine has issued nearly $20 billion worth of international bonds to be\u00a0frozen\u00a0, eleven dollar-denominated and two euro-denominated securities maturing between 2022 and 2030.<\/p>\n\n\n\n

Source<\/strong>:\u00a0Ukrgate<\/strong><\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

\u00a0Creditors must vote on Ukraine’s proposal to freeze payments on its Eurobonds for two years by August 9, KYIV. UkraineGate . 21. \u00a0July . 2022 | Economy . Details The bondholders received the issuer’s formal consent to change some of the terms of the bond contracts. Ukraine’s Ministry of Finance held a conference call with creditors […]<\/p>\n","protected":false},"author":14,"featured_media":42955,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[12149,554,813,2399,1000,1024,1064],"class_list":["post-42946","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-holders","tag-kyiv","tag-russia","tag-ukraine-gate","tag-ukraine-news","tag-ukrgate","tag-war"],"_links":{"self":[{"href":"https:\/\/www.ukrgate.com\/eng\/index.php?rest_route=\/wp\/v2\/posts\/42946","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.ukrgate.com\/eng\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.ukrgate.com\/eng\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.ukrgate.com\/eng\/index.php?rest_route=\/wp\/v2\/users\/14"}],"replies":[{"embeddable":true,"href":"https:\/\/www.ukrgate.com\/eng\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=42946"}],"version-history":[{"count":1,"href":"https:\/\/www.ukrgate.com\/eng\/index.php?rest_route=\/wp\/v2\/posts\/42946\/revisions"}],"predecessor-version":[{"id":42958,"href":"https:\/\/www.ukrgate.com\/eng\/index.php?rest_route=\/wp\/v2\/posts\/42946\/revisions\/42958"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.ukrgate.com\/eng\/index.php?rest_route=\/wp\/v2\/media\/42955"}],"wp:attachment":[{"href":"https:\/\/www.ukrgate.com\/eng\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=42946"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.ukrgate.com\/eng\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=42946"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.ukrgate.com\/eng\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=42946"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}