The default so much expected by our enemies is not going to happen. Ukraine has reached a deal with the creditors' committee on restructuring and partial debt remission”, announced Prime Minister of Ukraine Arseniy Yatsenyuk at a session of the Government on Thursday, August 27.
Transcript of the statement:
Six months ago our team, led by Minister of Finance of Ukraine Natalia Jaresko, launched unequal negotiations with our debtholders. Over the past five years it wasn’t us who have accumulated foreign loans worth about USD 40 billion. It's an incredible burden on the Ukraine’s state budget and on each citizen of the country.
There was little hope that Ukraine would successfully conclude negotiations with our external creditors. The default so much expected by our enemies is not going to happen. Ukraine has reached an agreement with the creditors' committee on restructuring and partial debt amortization.
Due to the efforts of the Minister of Finance and the Government of Ukraine we have managed to get the following terms:
First. 20% of Eurobonds of the country has been written off by our creditors. It means that the Ukrainian Government has written off nearly 4 billion US dollars.
Second. The cost of service of our debts will not increase in total spending, carried out by the State budget for loan servicing.
Third. In the next four years Ukraine will not repay the primary loan and the bonds’ maturities which we had to pay starting from 2015 have been prolongued for four years.
The terms offered to Ukraine have never been offered to any other country, since 2000, which haven’t defaulted on their debts. That is an average amount of remission, which could be agreed without announcing default, was not higher than 10%. Ukraine has managed to be forgiven 20% of obligations to our bondholders.
We acclaim our lenders for they have accepted a proposal of the Government of Ukraine, thus it is also their contribution to economic and financial stabilization in the country.
Moreover, Ukraine will issue a tool to raise interest of foreign creditors in the growth of the Ukrainian economy and the growth of the gross domestic product of the country.
The decision of the Government of Ukraine provides an opportunity to settle the economic and banking sector. This is another contribution to the stability of the national currency and the banking sector as well.
The Russian Federation didn’t join the creditors' committee. And therefore, the Government of Ukraine officially declares that Russia, under no circumstances, will get better terms than other lenders. It's their decision. Either you accept our terms, or you will never get better terms.