Report: Ukraine reaches restructuring deal with 20% bonds writedown

MOSCOW, Aug 27 (PRIME) -- Ukraine agreed a restructuring deal with creditors after five months of talks, giving President Pyotr Poroshenko some breathing room as he seeks to avert default and revive an economy decimated by a war with separatists backed by Russia, Bloomberg reported on Thursday.

Finance Minister Natalie Jaresko reached an accord with a Franklin Templeton-led creditor committee that includes a 20% writedown to the face value of about U.S. $18 billion of Eurobonds, the first of which matures in less than a month. The agreement also pushes back redemption dates by four years and sets interest at 7.75% on all maturities, according to an e-mailed statement from the Finance Ministry and the creditor committee. Russia is being offered the same terms as private bondholders.

“It’s been a very difficult five months," said Jaresko, a Chicago native who was given Ukrainian citizenship when Poroshenko appointed her finance minister last December. "I’m confident that the markets will receive this quite well,” she said in an interview on Wednesday.

Ukraine is seeking to meet the conditions of emergency assistance from the International Monetary Fund, which says debt restructuring should save Ukraine $15.3 billion through 2018 and reduce the ratio of debt to gross domestic product, while trying to end the worst recession anywhere in Europe, the Middle East or Africa.

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