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Paris Club creditors agreed on July 13, 2001 with the Government of Ukraine to a restructuring of Ukraine's external debt

Restructuring the debt of Ukraine

July 13, 2001

Paris Club creditors agreed on July 13, 2001 with the Government of Ukraine to a restructuring of Ukraine's external debt, following the approval on December 19, 2000 by the Executive Board of the International Monetary Fund of an extension of the arrangement under the Extended Fund Facility approved on September 4, 1998.

This agreement consolidates roughly US$ 580 million due on loans contracted by Ukraine before December 31, 1998 ("cut-off-date", see attached technical notes). This amount consists of principal arrears and maturities due from December 19, 2000 through September 3, 2002.

The rescheduling is structured on the following terms : credits are to be repaid over 12 years, with 3 years of grace, in 18 equal and successive semi-annual payments.

This agreement is expected to reduce debt service due to Paris Club creditors during 2001 and 2002 from an initial amount of around US$ 800 million to around US$ 285 million after rescheduling, which consists mainly of payments of interest due on existing loans, payments of interest on the rescheduled amounts and payments falling due after the end of the consolidation period in 2002.

This debt restructuring will make an important positive contribution to Ukraine's economic outlook. This rescheduling will satisfy Ukraine's financing requirements for 2001 and 2002, taking into account comparable treatment that Ukraine has obtained or has committed to seek from other external creditors.

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