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21 December 2023

Debt service suspension for Ukraine extended until 2027

On 21 December 2023, Germany joined the other members of the Group of Creditors of Ukraine (GCU) in signing an Amendment to the September 2022 Memorandum of Understanding that provides debt service suspension for Ukraine. The Amendment extends Ukraine’s debt service suspension until the end of March 2027, which is also when Ukraine’s current IMF programme is due to expire. In this connection, Germany welcomes the publication of the GCU’s statement confirming the extension.

Germany welcomes the measures and reforms that the Ukrainian government has implemented to address the economic and financial consequences of the war and that form part of the current IMF programme.

The GCU – comprised of Canada, France, Germany, Japan, the United Kingdom and the United States – urges all other official creditors to swiftly reach a debt treatment agreement with Ukraine with terms at least as favourable as those provided under the GCU agreement.

The Group of Creditors’ statements on debt service suspension for Ukraine are as follows:

GROUP OF CREDITORS OF UKRAINE
Statement

The representatives of the Group of Creditors of Ukraine (GCU) and the Government of Ukraine signed on December 21, 2023 an Amendment to the Memorandum of Understanding (MoU) on Debt Service Suspension of Ukraine concluded on September 14, 2022. This Amendment extends the Debt Service Suspension until the end of March 2027, corresponding to the end of the current IMF program. It aims at implementing the first phase of the financing assurances provided by the GCU on March 24, 2023 to support the approval of the program by the IMF Executive Board of Directors.

The representatives of the GCU take this opportunity to reiterate their unwavering support for Ukraine as it defends itself against Russia’s war of aggression.

The Group also welcomes the measures and reforms implemented by the government of Ukraine within and outside of the framework of the current IMF program to address the economic and financial consequences of the war.

The GCU urges all other official creditors to swiftly reach an agreement with Ukraine on a debt treatment at least as favorable. The GCU encourages external private creditors of Ukraine, especially bondholders, to provide the most appropriate debt treatment before the end of the debt service suspension they have granted in August 2022.

The Group will continue to closely coordinate and assess the situation with the support of the IMF, the World Bank and any other relevant institutions.

Group of creditors of Ukraine provides financing assurances to support the IMF’s approval of an upper credit tranche programme

1. The representatives of the Group of creditors of Ukraine held a meeting on 23 March 2023, in the presence of representatives of the International Monetary Fund and the World Bank, to provide financing assurances to support the approval by the IMF Executive Board of the envisaged IMF programme for Ukraine, which would help to restore the country’s macroeconomic stability.

2. During the meeting, the IMF provided a description of the economic and financial situation in the country, its assessment of Ukraine’s economic outlook and financing gap in the years 2023-2027 and its debt sustainability analysis.

3. The provision of financing assurances by the GCU entails the following:

a) An extension of the standstill from 1 August 2022 over the period of the IMF programme (2023-2027), consistent with the national laws of the creditor countries.

b) An additional debt treatment to restore debt sustainability, once the situation is stabilized or at the latest by the end of the IMF programme (2027). The GCU will grant a debt treatment consistent with the parameters of the IMF programme, provided that private external creditors deliver a debt treatment at least as favourable.

4. Finally, the Group urges all other official bilateral creditors to swiftly reach an agreement with Ukraine on a debt treatment at least as favourable.

5. The Group will continue to closely coordinate and assess the situation with the support of the IMF and the World Bank.

Background note: The Group of Creditors of Ukraine includes Canada, France, Germany, Japan, United Kingdom, and the United States of America. Observers to the Group include Australia, Austria, Belgium, Brazil, Denmark, Finland, Ireland, Israel, Italy, Korea, the Netherlands, Norway, Spain, Sweden, and Switzerland.

GROUP OF CREDITORS OF UKRAINE
Statement

The representatives of the Group of creditors of Ukraine (“The Group”) and the government of Ukraine met virtually on September 14, 2022 to conclude a Memorandum of Understanding (MoU) in order to implement the debt service suspension announced on July 20, 2022.

This MoU eases Ukraine’s liquidity pressures and allows its government to increase social, health and economic spending in response to Russia’s unjustified, unprovoked and illegal war of aggression.

During the meeting, the Minister of Finance of Ukraine provided a description of the economic and financial situation in his country and presented the measures taken by his government in the past few months to support the Ukrainian economy in the context of the war.

The Group welcomed the reforms implemented by the government of Ukraine to address the economic and financial consequences of the war. In addition, the Group welcomed the conclusion of an agreement with bondholders and warrantholders to defer debt payments for two years, which represents substantive support for the government and people of Ukraine.

Finally, the Group strongly encourages all other official bilateral creditors to swiftly reach agreement with Ukraine on a debt service suspension.

We will continue to closely coordinate and assess the situation with the support of the IMF and the World Bank.

GROUP OF CREDITORS OF UKRAINE
Statement

We, the Group of Creditors of Ukraine, express our solidarity with and support for Ukraine as it defends itself against Russia’s unjustified, unprovoked and illegal war of aggression.

We note the publication today of a consent solicitation from Ukraine to defer the debt service due to bondholders from August 1st, 2022 and to extend payment maturities.

In these exceptional circumstances, and acknowledging Ukraine’s exemplary track record of honoring debt service to date, the members of the Group of creditors of Ukraine support this consent solicitation and strongly encourage bondholders to consent to Ukraine’s request. The members of the Group of Creditors of Ukraine also note the concurrent publication today of a consent solicitation from Ukraine to adjust certain payment mechanisms in the terms of its GDP-linked warrants, and encourage warrantholders to consent to these requests.

Bondholders’ and warrant-holders’ approval of Ukraine’s proposals would represent substantive support for the government and people of Ukraine.

In light of this, we, as official bilateral creditors of Ukraine, intend to provide a coordinated suspension of debt service due by Ukraine from August 1st, 2022 until end-2023, with the possibility of an additional year, on our claims and consistent with the national laws of the creditor countries.

We also strongly encourage all other official bilateral creditors to swiftly reach agreement with Ukraine on a debt service suspension.

We will continue to closely coordinate and assess the situation with the support of the IMF and the World Bank.

Background note: The Group of Creditors of Ukraine includes Canada, France, Germany, Japan, United Kingdom, and the United States of America. Observers to the Group include Australia, Austria, Belgium, Brazil, Denmark, Finland, Ireland, Israel, Italy, Korea, the Netherlands, Norway, Spain, Sweden, and Switzerland.