Latest news with #GDPwarrants
Reuters
03-06-2025
- Business
- Reuters
S&P lowers issue rating on Ukraine's GDP-linked debt to 'D' from 'CC'
June 3 (Reuters) - S&P Global revised its issue rating on Ukraine's GDP-linked securities to "D" from "CC" on Tuesday, saying it missed the $665 million payment to holders of its GDP warrants due on June 2. The Ukraine government said on Friday it would not make the payment, based on 2023 economic performance, but would continue to seek a restructuring of the instrument. Ukraine created the instruments - fixed income securities indexed to economic growth - to sweeten its 2015 debt restructuring, but they had not been part of last year's broader restructuring due to their complex structure. "We do not expect the payment within the securities' contractual grace period of 10 business days, given the government's moratorium on payments on this bond unless it is restructured," ratings agency S&P said. In S&P's view, the Ukraine government's ability and medium-term incentives to meet its financial commitments in local currency (LC) are somewhat higher than those relating to foreign currency debt. "A default on these LC obligations would amplify banking sector distress, increasing the likelihood that the government would have to provide the banks with financial support and limiting the benefits of debt relief," it added.
Reuters
30-05-2025
- Business
- Reuters
Ukraine to default on payment to GDP warrant holders
LONDON/KYIV, May 30 (Reuters) - Ukraine's finance ministry said on Friday it would not be paying more than half a billion dollars due to holders of its GDP warrants, marking the first payment default since it created the instruments. The war-ravaged country said it owes $665 million on June 2 to holders of the $3.2 billion worth of warrants, based on 2023 economic performance. Last year, Ukraine's parliament approved a payment moratorium on the GDP-linked securities from May 31. "Ukraine remains committed to implementing a comprehensive, fair and equitable restructuring of the GDP-linked Securities," it said in a statement, adding it must comply with debt targets outlined in its IMF programme and in line with the comparability of treatment with official lenders. Ukraine created the instruments - fixed income securities indexed to economic growth - to sweeten its 2015 debt restructuring. But their complex structure meant they had not been part of last year's broader $20 billion restructuring. Ukraine's economy cratered after Russia's full-scale invasion in 2022, falling close to 30%. And while its economy staged modest growth in 2023 and 2024, its gross domestic product remains below the pre-war level. Finance Minister Serhii Marchenko described the warrants, with a payout linked to growth, as "designed for a world that no longer exists".
