Ukraine has announced a four-day extension – until 17:00 New York time on August 27 – of the early consent period for the exchange of eurobonds as part of their restructuring, which provides holders with the most favorable terms.

"Ukraine understands that some Holders may encounter technical problems in transmitting their participation instructions through their custodians and clearing systems, which may affect the timely transmission of such participation instructions before the early consent deadline," the Finance Ministry said in a stock exchange statement on Friday.

It is indicated that the extension period was chosen based on information received from such eurobond holders.

At the same time, it is noted that the settlement date remains unchanged and is expected to occur on or around August 30, 2024.

Voluntary participation in the exchange and filing applications within the early consent period gives the opportunity to eurobond holders to receive 1.25% additional cash reward, as well as new Series B bonds worth 12.65% of the eurobond amount.

The initial proposal of the Ministry of Finance on the exchange assumed the participation of only holders of 100 bonds with a face value of $1,000, but then concessions were made. "Thanks to the timely response of the National Securities and Stock Market Commission and coordinated actions with the National Bank and the Ministry of Finance of Ukraine, on August 16, 2024, additional information (clarifications) on the voting procedure for the corporate event on the exchange of government bonds for other securities and cash were sent to depository institutions," the Commission noted.

The regulator specified that the problem regarding the lot size of the securities packages was leveled, additional time was provided for making decisions, as well as the possibility of aggregate voting.

According to estimates by Taras Kozak, founder of the investment group Univer, for Forbes Ukraine, investments of Ukrainian individuals in Ukrainian eurobonds amount to about $20 million, in particular, his company has about 500 such clients, and after a series of transactions, there are about 260 of them left.

As reported, on July 22, Ukraine announced that it had reached fundamental agreements on restructuring the debt on eurobonds in the amount of about $23 billion with a special committee of owners of these eurobonds. The agreements provide for a write-off of 37% of the debt with the possibility of restoring 12% if a certain level of GDP is reached in 2028. The remaining debt will be issued as new eurobonds maturing in 2029-2036, with interest rates gradually increasing from 1.75% in the coming years to 7.75% at the end of the maturity date. A fee of 1.25% of the amount of the exchanged eurobonds will be paid for voluntary participation in such an exchange.

In order for the transaction to take place, the consent of 2/3 of the holders of all securities and at least half of the holders of each issue will be sufficient, provided that less than a quarter of the holders of each issue are against such an agreement.