How Ukraine Secured a Historic Debt Restructuring Amid War

Following Russia's invasion, Ukraine confronted a crippling economy and mounting debt. By August 2022, the country negotiated with creditors to pause bond payments, culminating in one of the largest restructurings in history. Key negotiations took place in Paris, leading to a $20 billion restructuring. The deal will save Ukraine $11.4 billion over three years.

Amid the economic turmoil following Russia's invasion, Ukraine's financial adviser, Rothschild & Co, presented a detailed history of sovereign debt restructurings to Yuriy Butsa. Unfamiliar with the 2015 debt rework, Butsa quickly immersed himself in the materials as Ukraine faced economic devastation due to the war.

By August 2022, Ukraine agreed with creditors to pause bond payments, achieving one of history's largest debt restructurings by September. This major restructuring will save Ukraine $11.4 billion over the next three years, vital for its ongoing war efforts and IMF program.

Initially strained, negotiations took a pragmatic turn in July 2022 at Rothschild's Paris offices. With IMF's pivotal support, Ukraine and creditors reached a common ground, leading to the unprecedented deal. Amid personal adversities, Butsa secured more than 97% approval from bondholders.

(With inputs from agencies.)