Ukraine’s overseas creditors have backed its request for a two-year freeze on payments on almost $20 billion in international bonds, a regulatory filing showed on Wednesday, a move that will allow the war-ravaged country to avoid a messy debt default.
With no sign of peace or a ceasefire on the horizon nearly six months after Russia’s invasion began, holders of around 75% of the outstanding total agreed to Kyiv’s proposal, documents showed.
“Ukraine will save almost $6 billion on payments,” said Prime Minister Denys Shmyhal in a statement. “These funds will help us maintain macrofinancial stability, strengthen the sustainability of the Ukrainian economy and improve the power of our army.”
The solicitation needed approval by holders of at least two-thirds of the total and more than 50% of each issue.
“The two-year debt freeze makes sense because even if the war ends soon, Ukraine’s situation is not going to improve overnight,” said Stuart Culverhouse, chief economist at London-based research firm Tellimer. “Creditors were even surprised that the country decided to be current on the bonds until now.”