IMF's Lagarde lauds Ukraine debt deal

GMT 16:18 2015 Thursday ,27 August

Arab Today, arab today IMF's Lagarde lauds Ukraine debt deal

Ukraine's President Petro Poroshenko (L)
Washington - AFP

International Monetary Fund Managing Director Christine Lagarde cheered Ukraine's debt-cutting deal Thursday with a group of creditors, and called on all of the country's bond holders to endorse it.

"I am very pleased with today's announcement and appreciate the positive attitude of both the ad hoc Creditor Committee and the Ukrainian government," Lagarde said in a statement.

"The announced parameters of the agreement will help restore debt sustainability and -- together with the authorities' policy reform efforts -- will substantively meet the objectives set under the IMF-supported program," she said.

The Fund had put heavy pressure on the Creditor Committee -- a group of four large US investment houses holding nearly half of the country's $19 billion in commercial debt -- to slash the debt burden on Kiev as it tries to rebuild the country's economy under an IMF bailout program.

In the deal announced Thursday, lenders will accept a 20 percent write-down of the debt and slightly longer repayment terms, though the coupon rates on the bonds were increased.

The IMF said the deal will meet the requirements of the $40 billion rescue program it designed earlier this year, which required an effective $15 billion cut in the country's debt burden over four years.

"Full implementation of the agreement will provide the targeted external debt service relief, reduce annual post-program gross financing needs as envisaged, and place public debt on a clearly downward path," Lagarde said.

"It is therefore important that the agreement gains broad support by all concerned Eurobond holders," she added.

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