Kiev seeks to avert default by swapping bonds

Ukraine is seeking to shed the financial burden of $3.2 billion of GDP-linked guarantees and has offered to exchange them for new international bonds.

The move is intended to help the country emerge from insolvency and resolve the remainder of the debt incurred after the Russian invasion.

The swap would involve so-called C bonds maturing by 2032. However, the key creditor group has not yet approved the terms and negotiations are continuing.

Those who approve the offer by 12 December could receive an additional payment. Although this is a politically sensitive move, the government believes the deal is essential for the stability of the state budget.

In fact, guarantees linked to GDP growth could cost the country up to $6 billion in the future.

The International Monetary Fund has not commented on the offer, but Ukraine is so far confident of lender support and says the move is crucial for post-war reconstruction and fiscal stability.

(reuters, swag)