Ukraine and U.S. sign agreement on debt service deferral

MOSCOW. March 29 (Interfax) - Ukrainian Finance Minister Sergei Marchenko and U.S. Ambassador in Kiev Bridget Brink have signed a bilateral agreement postponing Ukrainian debt payments.

"The signing of the agreement was conditioned by the provisions of the Memorandum of Understanding on the debt service suspension with a group of Ukraine's official creditors from the G7 and the Paris Club," Ukrainian media quoted the Finance Ministry as saying in a press release on Friday.

Ukraine's debt to the United States stood at 0.2 billion hryvni as of late February 2024, according to information on the ministry's website.

The U.S. has been providing financing to Ukraine as grants since the start of the crisis. Prior to that, funding had been extended through Eurobonds issued by Ukraine under U.S. guarantees.

"The signing of this agreement will help reduce the debt burden on the state budget and redirect funds initially earmarked for debt payments and service to social and humanitarian needs," Marchenko was quoted by the press release as saying.

"Good to meet with the finance minister to discuss Ukraine's efforts to sustain its economy and to offer some relief to allow debt service obligations to be redirected to humanitarian needs," U.S. Ambassador Brink said on social media.

As reported, prior to the International Monetary Fund's approval of a new $15.6-billion four-year Extended Fund Facility (EFF) for Ukraine in late March 2023, the Group of Creditors for Ukraine (Paris Club) provided financial guarantees to this program following a meeting with IMF and World Bank representatives. On official debt, the Group of Creditors has committed to an extension of the current debt standstill for the period of the 2023-2027 EFF arrangement. A condition for this deferral is the same steps by Ukraine's private foreign creditors, mainly Eurobond holders.