Ukraine Has Reached a Debt Deal. Now What?

While most analysts agree that the deal buys time for the authorities in Kiev, the terms of the deal seems to favor the lenders over the Ukrainian government. Goldman Sachs noted that the likelihood that bondholders would vote against the bond restructuring was small “given the attractiveness of the offer relative to market expectations.”

In return for a four-year extension on payments of the remaining debt, Ukraine agreed to a higher coupon (interest rate) of 7.75 percent, up from 7.25 percent. Further, after the four-year period expires in 2019, Ukraine will be obliged to spend 40 percent of any GDP growth over 4 percent on debt repayment.

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