Rothschild Assisted Ukraine in Securing Debt Restructuring, According to Reuters
Ukraine’s arrangement with bondholders is said to have finally materialized thanks to the involvement of financial adviser Rothschild & Co. Read Full Article at RT.com
TroibNews 
In July 2022, Kiev's financial advisor orchestrated in-person meetings with bondholders after initial negotiations were unsuccessful, a recent report states.
The report from Reuters on Tuesday disclosed that Ukraine's recent debt restructuring agreement with its bondholders was achieved through the efforts coordinated by Rothschild & Co. Rothschild had been appointed as an advisor to Ukraine's Finance Ministry since 2017.
Last week, Kiev declared that it had reached a settlement with a consortium of international investors to reorganize its $20 billion in debt. The freeze on debt repayments, which began in February 2022 following the onset of hostilities with Russia, was facilitated by notable bondholders including US financial behemoths BlackRock and Pimco, and French investment powerhouse Amundi.
A committee representing the owners of 25% of the bonds consented to take a 37% hit, amounting to $8.7 billion, on the face value of their debts.
As per reports, the International Monetary Fund has verified that the arrangement aligns with the framework of its $122 billion financial aid plan for Kiev. The agreement has received the green light from both the IMF and other key creditors like the US and the Paris Club, as per a statement released on the London Stock Exchange detailing the agreement's terms.
This debt restructuring will enable Kiev to conserve $11.4 billion over the upcoming three years, which is vital for both its military operations and ongoing involvement in the IMF program. According to Reuters, this restructuring ranks among the swiftest and most substantial historically, surpassed only by those of Argentina and Greece.
However, the report pointed out that the first rounds of discussions initiated in June 2022 with lenders did not proceed as expected. The primary committee of bondholders aired grievances that the proposed cuts exceeded what they were anticipating by a significant margin and threatened to severely strain the relationship.
As the deadline for the payment moratorium in August 2022 neared, Rothschild set up direct discussions at its Paris offices. These crucial negotiations included top asset management firms and their legal and financial consultants, Kiev's debt leader Yury Butsa, Ukraine’s longstanding legal counsel White & Case, and the Rothschild team.
Bondholders pushed for the immediate resumption of coupon payments, a strategy for better principal recovery, and a preference for simplicity in the agreements. IMF personnel were reported to be working diligently to finalize the numbers.
In response, Kiev proposed a simpler solution involving GDP-linked bonds while addressing creditors' desires for immediate coupon payments, starting at a rate of 1.75% and potentially increasing to 7.75%.
According to Reuters, the consensus from the bondholders' vote showed overwhelming support, with more than 97% in favor.
Lucas Dupont for TROIB News
The report from Reuters on Tuesday disclosed that Ukraine's recent debt restructuring agreement with its bondholders was achieved through the efforts coordinated by Rothschild & Co. Rothschild had been appointed as an advisor to Ukraine's Finance Ministry since 2017.
Last week, Kiev declared that it had reached a settlement with a consortium of international investors to reorganize its $20 billion in debt. The freeze on debt repayments, which began in February 2022 following the onset of hostilities with Russia, was facilitated by notable bondholders including US financial behemoths BlackRock and Pimco, and French investment powerhouse Amundi.
A committee representing the owners of 25% of the bonds consented to take a 37% hit, amounting to $8.7 billion, on the face value of their debts.
As per reports, the International Monetary Fund has verified that the arrangement aligns with the framework of its $122 billion financial aid plan for Kiev. The agreement has received the green light from both the IMF and other key creditors like the US and the Paris Club, as per a statement released on the London Stock Exchange detailing the agreement's terms.
This debt restructuring will enable Kiev to conserve $11.4 billion over the upcoming three years, which is vital for both its military operations and ongoing involvement in the IMF program. According to Reuters, this restructuring ranks among the swiftest and most substantial historically, surpassed only by those of Argentina and Greece.
However, the report pointed out that the first rounds of discussions initiated in June 2022 with lenders did not proceed as expected. The primary committee of bondholders aired grievances that the proposed cuts exceeded what they were anticipating by a significant margin and threatened to severely strain the relationship.
As the deadline for the payment moratorium in August 2022 neared, Rothschild set up direct discussions at its Paris offices. These crucial negotiations included top asset management firms and their legal and financial consultants, Kiev's debt leader Yury Butsa, Ukraine’s longstanding legal counsel White & Case, and the Rothschild team.
Bondholders pushed for the immediate resumption of coupon payments, a strategy for better principal recovery, and a preference for simplicity in the agreements. IMF personnel were reported to be working diligently to finalize the numbers.
In response, Kiev proposed a simpler solution involving GDP-linked bonds while addressing creditors' desires for immediate coupon payments, starting at a rate of 1.75% and potentially increasing to 7.75%.
According to Reuters, the consensus from the bondholders' vote showed overwhelming support, with more than 97% in favor.
Lucas Dupont for TROIB News
