G7 creditors said they would only extend their grace period for Ukrainian debt if private creditors agreed to a treatment at least as favourable. But since it is Paris Club creditors that frequently offer the most significant disposition for debt relief, their commitment only to extend the debt-service freeze at this stage suggests external private creditors are unlikely to go much further than that next year.
Ukraine is only scheduled to pay USD 200m (0.1% of GDP) in debt service to the Paris Club next year but extending the debt-service suspension would deliver a more substantive USD 4.4bn (2.9% of GDP) in savings due to international bondholders in 2024. Negotiations with commercial creditors will begin late this year or in early 2024. We believe an agreement is likely…
Read More
