Ukraine Secures Approval for $20 Billion Debt Restructuring Amid War

Ukraine has gained approval from international bondholders to restructure over $20 billion in debt as it continues to grapple with its ongoing conflict with Russia. With over 97% of creditors backing the plan, Ukraine aims to cut its debt significantly to achieve economic stability and maintain budget stability for defense.

Ukraine announced on Wednesday that international bondholders had formally approved its plan to restructure over $20 billion of debt amid its ongoing war with Russia. Kyiv confirmed that over 97% of its debt holders approved by the required deadline, allowing the restructuring to proceed.

The plan seeks to reduce the face value of its international bonds by more than a third, helping to decrease its debt to a sustainable level, thus ensuring continued support from the International Monetary Fund and Western government backers. According to Ukraine's Finance Minister Serhiy Marchenko, finalizing the restructuring deal is crucial to maintaining budget stability needed for financing defense and restoring long-term economic stability.

This is the second restructuring effort for Ukraine within a decade, following the first one in 2015 that came after the Crimea annexation. This time, the process has been notably swift, taking just four months to negotiate, and replaces a two-year bond payment moratorium granted in the summer of 2022. As part of the deal, bondholders have accepted a writedown of 37%, or $11.4 billion, saving Ukraine significant funds over the next three years.

(With inputs from agencies.)