Authorities approved the change of status of debt of Kiev Eurobond

Authorities approved the change of status of debt of Kiev Eurobond


The debt of Kiev on external borrowings of local 2005 and 2011 transferred to the state. Changes in the maturities of Eurobonds in 2005, it is proposed to define 2019, and Eurobonds for 2011 — 2020.

KIEV, 22 Dec. Kyiv city Council approved the transfer of the local city’s debt on Eurobonds in the state, said in a statement on the website of the municipality of Kiev.

“The Kyiv city Council on December 22, at the plenary session approved the transfer of the local debt of Kiev on external borrowings of local 2005 and 2011 in the state”, — stated in the message.

Previously approved the basic conditions of the debt transfer. During the transfer of the local debt in the state are changing the maturities of the bonds — maturity of Eurobonds-2005 is proposed to determine 2019, and Eurobonds-2011 — 2020 (in 2005 have been placed Eurobonds on $ 250 million with a maturity of up to 6 November 2015, at 8% per annum, and in 2011 — 300 million with a maturity of 11 July 2016 under 9,375% per annum).

New bonds shall be distributed among the holders that participate in debt transactions of Kiev, after writing off 25% of the existing notes and accrued interest will be capitalized and added to the new bonds; annual interest on the new bonds is reduced and set at 7.75%.

Earlier the Cabinet of Ministers of Ukraine decision dated September 22, announced a moratorium on payments on Eurobonds. From 23 September Ukraine went into technical default, refusing to pay $ 500 million on its foreign debts. Kyiv hopes to hold the debt restructuring, but instead of the promised 20 per cent cancellation of the debt for Eurobonds, the situation may go in the direction of lawsuits. The Ministry of Finance noted that this restructuring is in the interests of the city and creditors, and expressed readiness “to support the efforts of Kiev to help it to undertake the necessary restructuring”.