Ukraine to skip $665 million debt payment — Is there a default risk?
Ukrainian Finance Minister Sergii Marchenko (Getty Images)
The next payment on Ukraine's state derivatives exceeds $665 million, but it will not be made at this time, the Ministry of Finance of Ukraine has announced.
Today, Ukraine's Ministry of Finance published a statement on the Irish Stock Exchange confirming that, as of April 30, 2025, the payment due on June 2 under Ukrainian state derivatives amounts to $665,453,507.60.
However, Ukraine reminded holders of the state derivatives that, in accordance with a government decision dated August 27, 2024, a moratorium on payments under these instruments remains in effect until the completion of their restructuring process.
In August 2024, the cross-default clause was removed from the terms of Ukraine's state derivatives. This means that a default on one debt obligation does not automatically trigger a default on another.
"This means that the moratorium on payments under state derivatives does not result in a cross-default on Ukraine's Eurobond obligations and does not pose a threat to the country's financial stability," the Finance Ministry explained.
The moratorium on payments under state derivatives is part of Ukraine's broader debt restructuring strategy, announced in August 2024.
The Ministry explained that this strategy envisions fair and equal treatment of all creditor claims within the scope of the restructuring process, with the goal of restoring debt sustainability under the IMF Program.
"Ukraine remains committed to constructive dialogue with all stakeholders and continues consultations to achieve a fair and comprehensive restructuring of its state derivatives, ensuring long-term debt sustainability without jeopardizing the country's recovery and reconstruction," the ministry added.
Last year Kyiv reached an agreement with the Committee of Eurobond Owners of Ukraine to defer payments on external debt.
This was a significant step expected to save Ukraine $11.4 billion in debt servicing over three years and $22.75 billion by 2033.
In April, Ukraine also declined to make payments on its 2015-issued bonds.
Following the occupation of Crimea, Ukraine issued special securities worth $2.6 billion — so-called GDP warrants — as part of a debt restructuring deal.
Under the terms of these instruments, if Ukraine's economy grows by more than 3% annually, investors are entitled to an additional payout.
Moreover, as reported by RBC-Ukraine last month, Ukraine failed to reach an agreement with creditors on restructuring the $2.6 billion in payments. The negotiations were held between April 15 and April 23.
