Ukraine Successfully Restructures $2.6 Billion in GDP Warrants

On December 18, 2025, Ukraine announced a significant restructuring of its GDP-linked warrants, totaling $2.6 billion. This deal was overwhelmingly approved by 99.06% of warrant holders, surpassing the 75% threshold required for the exchange. The restructuring involves converting these warrants into new conventional sovereign bonds, specifically Series C bonds maturing in 2032, with a total face value of approximately $3.5 billion. A smaller portion, around $34 million, will be exchanged into Series B bonds maturing in 2030 and 2034. Additionally, Ukraine will cancel $604 million in GDP warrants held by the state, effectively retiring this financial instrument entirely.

Ukraine Fully Retires GDP Warrants in Exchange for $3.5 Billion in EurobondsPublic debt restructuring: Ukraine exchanges GDP-linked bondsUkraine Completes GDP Warrant Swap After Holders Approve Restructuring VoteReuters

The GDP warrants were originally issued during Ukraine's 2015 debt restructuring following Russia's annexation of Crimea. These warrants posed a significant fiscal risk due to their structure, which linked payments to GDP growth without a cap after 2025. The Ministry of Finance estimated that payments under these warrants could have ranged from $6 billion to $20 billion between 2025 and 2041, depending on economic recovery rates. The risk became apparent when Ukraine's economy rebounded by 5.3% in 2023, triggering a payment claim of $643 million despite the overall economic situation remaining precarious.

Ukraine Completes GDP Warrant Swap After Holders Approve Restructuring VoteUkraine Fully Retires GDP Warrants in Exchange for $3.5 Billion in EurobondsWill save the state billions of dollars in the post-war period: Ukraine announced a successful restructuring of GDP warrantsPublic debt restructuring: Ukraine exchanges GDP-linked bonds

Finance Minister Serhiy Marchenko emphasized that this restructuring will save Ukraine billions of dollars in potential payouts during the post-war recovery period. He described the GDP warrants as a "toxic instrument" that could have jeopardized the country's recovery and reconstruction efforts. The conversion into standard debt instruments is expected to enhance budget predictability and reduce long-term volatility in public finances. This move is seen as crucial for Ukraine's path toward long-term debt sustainability and a potential return to international capital markets once security conditions improve.

Will save the state billions of dollars in the post-war period: Ukraine announced a successful restructuring of GDP warrantsUkraine Completes GDP Warrant Swap After Holders Approve Restructuring VoteReutersUkraine Fully Retires GDP Warrants in Exchange for $3.5 Billion in Eurobonds

The Ministry of Finance stated that the successful restructuring is a substantial step toward strengthening Ukraine's debt sustainability and fiscal predictability. Marchenko noted, "We are retiring a toxic instrument that has become a serious fiscal risk for Ukraine and could have undermined our recovery and reconstruction." Yuriy Butsa, Ukraine’s Commissioner for Public Debt Management, added that the transaction addresses key risks identified in the country’s debt management strategy.

Will save the state billions of dollars in the post-war period: Ukraine announced a successful restructuring of GDP warrantsUkraine Completes GDP Warrant Swap After Holders Approve Restructuring VoteReutersPublic debt restructuring: Ukraine exchanges GDP-linked bonds

Following the positive vote, the restructuring process has moved to the settlement phase, which is expected to conclude by the end of the year. This agreement aligns with the expectations of Ukraine's bilateral partners and is anticipated to help meet the debt benchmarks set under the International Monetary Fund program.

Will save the state billions of dollars in the post-war period: Ukraine announced a successful restructuring of GDP warrants

While the restructuring has been widely reported as a success, some analysts remain cautious about Ukraine's ability to stabilize its economy amid ongoing conflict with Russia. The International Monetary Fund estimates that Ukraine will require approximately €135 billion ($159 billion) for 2026 and 2027, highlighting the ongoing financial challenges the country faces.

Reuters

• “This restructuring will allow Ukraine to save billions of dollars of potential payouts during post-war recovery.” — Serhiy Marchenko, Finance Minister of Ukraine

Public debt restructuring: Ukraine exchanges GDP-linked bonds

• “We are removing a toxic instrument that posed a serious fiscal threat to Ukraine and could have jeopardized our recovery and reconstruction,” — Serhiy Marchenko, Finance Minister of Ukraine

Ukraine Completes GDP Warrant Swap After Holders Approve Restructuring Vote

• “Yuriy Butsa, Government Commissioner for Public Debt Management, emphasized that the restructuring will make Ukraine's debt structure more predictable and sustainable.” — Yuriy Butsa, Government Commissioner for Public Debt Management

Will save the state billions of dollars in the post-war period: Ukraine announced a successful restructuring of GDP warrants