Published: May 31, 2025 10:20 am
Author: RT
Kiev will skip the payment of over $600 million it owes to holders of $2.6 billion in debt, its Finance Ministry has said
Ukraine will not pay $665 million it owes to international creditors, the country’s Finance Ministry said in a statement on Friday. Kiev earlier failed to agree on restructuring terms with a group of debt holders led by hedge funds.
The payment on the country’s GDP-linked securities – debt with annual payouts tied to economic growth and amounting to $2.6 billion – is due on June 2.
Ukraine was originally scheduled to make the payment a year ago, but a moratorium on bond settlements, approved by the authorities in Kiev, allowed the cash-strapped country to avoid default. The moratorium will remain in place until the debt is restructured, the statement says.
The Finance Ministry noted that, under an agreement reached with international creditors in 2024, the so-called cross-default clause was removed from contracts.
That clause had stipulated that failure to make payments on the GDP warrants could trigger a default on other debt obligations, such as the country’s international bonds. The ministry emphasized that the removal of the clause means Ukraine does not need to declare a default on its international bonds.
READ MORE: Ukraine’s debt doubles in three years – finance minister
In April, Ukrainian authorities said they had failed to reach a deal to restructure part of the country’s debt, with a nominal value of $3.2 billion.
According to Bloomberg, Ukraine offered investors two options during the unsuccessful talks, including a full exchange for sovereign bonds by reopening existing notes. However, creditors reportedly agreed only to restructure the May payment and demanded over $400 million in cash, as well as the conversion of more than $200 million into new bonds – a condition Kiev rejected.
