The Ministry of Finance of Ukraine has announced the launch of a large-scale operation to exchange $2.6 billion in GDP-linked warrants for new amortizing Series B eurobonds maturing in 2030–2032.
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The transaction is a key element of Ukraine’s updated public debt management strategy. The country aims to reduce potential future payments on GDP-linked warrants, which could become a significant fiscal burden once economic growth resumes.
Under the exchange terms, holders of GDP-linked warrants will receive new amortizing Series B eurobonds at a conversion ratio of 1.34, along with a cash incentive:
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7% of notional value for those providing consent by December 12 inclusive;
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4.5% for participation between December 13 and December 17.
Ukraine reported “substantial progress” in negotiations with the bondholder committee, although consultations needed to fully finalize the terms will continue until December 5.
The amortization schedule for the new bonds is as follows:
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45% of the principal repaid on February 1, 2030;
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45% on February 1, 2031;
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10% on February 1, 2032.
The interest rate will increase gradually:
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4% per annum until February 1, 2027;
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5.5% until August 1, 2029;
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7.25% thereafter until final maturity.
Holders who do not participate in the exchange—should it be approved—will receive Series B eurobonds (Restructuring-2024) with a combined conversion factor of 1.36, split equally at 0.68 into bonds maturing in 2030 and 2034.
The coupon structure for these instruments will be lower and adjust later:
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0% until February 1, 2027;
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3% until August 1, 2033;
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7.75% thereafter.
Ukraine emphasized that even with participation from only 50% of warrant holders, it may initiate the delisting of the GDP-linked warrants from the exchange.
Approval of the exchange requires a quorum representing 75% of the notional amount of outstanding warrants.
Voting results are expected on December 22, 2025.
According to the Frankfurt Stock Exchange, GDP-linked warrants rose 0.66% on December 2 to 92.15% of par value — the highest level since October 2021, a pre-war period when markets anticipated stable Ukrainian GDP growth. Their price fell below 20% after the start of the full-scale invasion but later began to recover amid the new IMF program and expectations of post-war reconstruction.
GDP-linked warrants were issued in 2015 as part of Ukraine’s sovereign debt restructuring and provide payments tied to GDP growth rates. Under favorable economic conditions, they could have generated significant budgetary expenditures in 2026–2030, prompting the government to seek ways to limit future risks.
