Ukraine on the verge of bankruptcy

Ukraine's government said it failed to reach an agreement with a group of foreign creditors, which includes financial giants BlackRock and PIMCO, to restructure Ukraine's $20 billion Eurobonds, according to a Reuters report.

In February 2022, bondholders granted Ukraine a two-year debt freeze due to its conflict with Russia. That deal expires in August, and bondholders are eager for Kyiv to start paying interest on its debt again. Ukraine will face bankruptcy if a new debt repayment is not agreed upon, damaging the country's credit rating and making it even more difficult for it to borrow in the future, writes RT.

Formal negotiations between Kyiv and creditors representing a fifth of the country's $20 billion in outstanding Eurobonds have been going on for nearly two weeks. Ukraine would exchange exceptional bonds for new instruments.

"Although Ukraine and creditors did not reach an agreement on the terms of the restructuring during the consultation period, they will continue engagement and constructive discussions through their advisers," the government said in a statement, adding that talks with other investors would also continue.

Ukrainian Finance Minister Serhiy Marchenko confirmed that negotiations with bondholders will continue and added that he expects an agreement to be reached by August 1.

He said the country's economy is "fragile" and depends on consistent and significant support from its partners.

"Timely debt restructuring is a key part of this support. Strong economies must support strong armies to win wars," Marchenko said.

Ukraine has proposed to exchange its bonds for a series of new ones with a maturity date set to 2040. and interest payments starting at one percent in the first 18 months, then progressively increasing to six percent, reported RT.