UPDATE 1-Ukraine warrant holder group is not yet backing Kyiv's swap proposal

"Should the outstanding issues be resolved in the coming days, the Ad Hoc Group expects to participate in the exchange offer." KYIV KEEN TO REWORK COMPLEX, COSTLY GDP-LINKED WARRANTS Ukraine managed to complete a restructuring of some $20 billion in international bonds last year after defaulting on its external debt in 2022 following Russia's full-scale invasion. However, it has struggled to rework the complex and costly economic growth-linked instruments that might mean it having to pay out billions of dollars to investors in the coming years.

A key group of Ukraine creditors said on Thursday it could not yet support Kyiv's proposal to swap $2.6 billion in GDP-linked warrants for international bonds.

Ukraine launched an offer on Monday to replace its GDP warrants for bonds with a rising interest rate, plus up to $180 million up-front cash payment if the deal passes swiftly with widespread support. The group said it had held substantive negotiations with the government on a number of points in Kyiv's proposal launched on Monday, including the terms of the new bond, and would continue talks.

"Although progress has been made, consensus has not yet been reached on the Invitation, and the long-form documentation has not been agreed," it said in an emailed statement, referring to the terms and conditions of the proposed transaction. "Should the outstanding issues be resolved in the coming days, the Ad Hoc Group expects to participate in the exchange offer."

KYIV KEEN TO REWORK COMPLEX, COSTLY GDP-LINKED WARRANTS Ukraine managed to complete a restructuring of some $20 billion in international bonds last year after defaulting on its external debt in 2022 following Russia's full-scale invasion.

However, it has struggled to rework the complex and costly economic growth-linked instruments that might mean it having to pay out billions of dollars to investors in the coming years. The creditor group also urged warrant holders on Thursday to await further communication before taking any action on the government offer. It expects to publish a further update before 1700 GMT on Friday, the statement said.

In previous statements, the Ad Hoc Group said it represents more than 35% of the warrants, and identified holders well in excess of 60%. It says it is cooperating with those outside its group to work on a deal that is in investors' best interests. The deal would clear the major remaining hurdle in Ukraine's push to emerge from its 2022

default .

Ukraine's GDP warrants traded 0.5 cents lower to be bid at 100.132 cents on the dollar, Tradeweb data showed.

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