Clauses & Controversies
Ep 137 ft. Joseph Cotterill
Aug 5, 2024
In this discussion, Joseph Cotterill, a Financial Times expert, delves into Ukraine's ambitious debt restructuring deal amid ongoing conflict, addressing the unrealistic IMF projections and bondholder dynamics. He explains the complexities of including state-owned enterprise debts like Ukrenergo and the urgency behind restoring investor confidence. The conversation also touches on Mozambique's contentious tuna bonds saga, including a recent High Court ruling that awarded significant damages and the ramifications of corruption and legal battles on the country's financial landscape.
43:09
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Quick takeaways
- Ukraine is restructuring $24 billion in debt amidst financial challenges, but optimistic IMF projections raise concerns among bondholders about economic recovery.
- The Mozambique tuna bonds case illustrates the complexities of corruption in sovereign borrowing, with recent rulings impacting accountability and potential litigation against multi-national entities.
Deep dives
Ukraine's Debt Restructuring Efforts
Ukraine is actively working on restructuring approximately $24 billion in euro bonds as it faces ongoing financial challenges due to the war with Russia. Following a two-year suspension of payments, an agreement in principle was reached with a creditor committee representing around 25% of the bondholders, and an exchange offer is anticipated soon. This agreement aims to restore market access for Ukraine while navigating the complexities of its current economic situation, which has worsened due to hostilities. Bondholders are set to experience significant haircuts, with a structured framework put in place to address varying scenarios regarding the length and outcome of the conflict.
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