Ukraine has initiated a new phase of negotiations with the holders of GDP bonds regarding the terms of debt restructuring. It has been reported that a group of investors, led by hedge funds, signed non-disclosure agreements this week, allowing for what are referred to as “limited” negotiations. Such negotiations involve the exchange of non-public information and temporary restrictions on the sale of the relevant securities due to the sensitivity of the issues being discussed for the market. Among the leading holders of these bonds are hedge funds Aurelius Capital Management LP and VR Capital Group.
This is reported by Finway
Activity in the GDP Bond Market
On Tuesday, Ukrainian GDP bonds were trading at over $0.91 for every $1 of nominal value, demonstrating approximately a 20% increase in their value since the beginning of the year. This trend indicates that investor interest in these securities remains strong despite prolonged negotiations regarding restructuring.
Progress of Negotiations and Terms of Bond Issuance
It is known that from October 16 to November 5, a second round of negotiations took place with a special committee that includes institutional investors holding about 35% of all Ukrainian GDP bonds. However, this attempt also did not lead to mutually acceptable terms for debt restructuring. The first round occurred back in April 2025 but also ended without results. The Ministry of Finance expressed hope that new terms could be agreed upon by the end of the current year.
The GDP bonds (currently held by investors with a nominal value of $2.6 billion) were issued during the 2015 debt agreement when investors wrote off 20% of Ukraine’s external debt. Payments on them depend on the growth dynamics of the country’s GDP from 2019 to 2038, but with a two-calendar-year delay – that is, between 2021 and 2040.
It is worth noting that the GDP bonds were issued in 2015 as part of a large-scale debt restructuring of Ukraine. Their total amount is $2.6 billion, and payments on these securities depend on the country’s GDP growth rates in specified years, but with a two-year deferral.