Yesterday, 22 September, Ukraine successfully launched exchange offers in relation to 14 sovereign and sovereign-guaranteed Eurobonds with outstanding principal amounts of c.US$18 billion. This follows less than a month after Ukraine and its ad hoc creditors’ committee (“AHC”) agreed Indicative Heads of Terms, following months of intense negotiations.
“The agreement to restructure $18bn of privately held government debt stands in stark contrast to Greece’s nearly apocalyptic showdown with the European Union this year and Argentina’s simmering standoff with holdout creditors.
“Ukraine’s deal showcases two important evolutionary steps: a rare case of successful investor-state coordination and the latest application of equity principles in sovereign finance.” (Financial Times, 17 September)
Weil are pleased to have advised the AHC throughout this ground-breaking restructuring, which plays a critical role in securing Ukraine’s ongoing stability and economic recovery. Creditor meetings in relation to 14 Eurobonds will be held on 14 October 2015.
In addition to new notes, creditors will receive a value recovery instrument in the form of a GDP growth warrant which was carefully structured to avoid certain flaws which had become synonymous with these types of instruments. It incorporates distinct mechanisms for value preservation and investor protection.
The AHC is also advised by Blackstone as financial adviser.
Ukraine is advised by Lazard as financial advisor and global coordinator and White & Case LLP as international legal counsel.