LONDON: Ukraine said on Monday it had reached an agreement in principle with a group of creditors to restructure $20 billion of international bonds, bringing the war-torn country closer to an unprecedented debt rework.
Ukraine’s announcement comes just over a week before a two-year debt suspension agreement struck in 2022 is due to run out and marks the first time a country has embarked on a debt restructuring during a full-scale war.
“After months of engagement and hard work with our private bondholders, the IMF and our bilateral partners, we have reached an agreement in principle with the Ad Hoc Creditor Committee on the comprehensive restructuring of our public external debt,” Finance Minister Serhiy Marchenko said in a statement.
This was an important step to ensure Ukraine maintained the budget stability and cash resources needed to continue financing its defense, he added.
Ukraine’s finances are precarious as its 28-month war with Russia drags on. Russia’s 2022 invasion decimated its economy, leaving it heavily reliant on money – and military aid – from international partners.
The US presidential election in November and the risk of wavering commitment to maintain support for Ukraine under a potential Donald Trump presidency increased pressure for a debt restructuring, sources close to the talks and analysts said.
The proposal would see a 37 percent nominal haircut on Ukraine’s outstanding international bonds, saving Kyiv $11.4 billion in payments over the next three years — the duration of the country’s program with the International Monetary Fund set to expire in 2027, according to government statements.
The government said the IMF had confirmed that the deal was compatible with the parameters of its $122 billion support package, and that the country’s official lenders, the Group of Creditors of Ukraine (GCU), had also signed off on it.
A spokesperson for the Paris Club of creditor nations, which usually handles communications for the GCU, confirmed the group was comfortable with the proposal.
The IMF welcomed the agreement and confirmed it is consistent with the current program, adding that it will be “essential to bring Ukraine’s debt burdens to sustainable levels, thereby ensuring room for critical spending and supporting growth.”
Ukrainian Prime Minister Denys Shmyhal said in a message on the Telegram app that the deal would free up resources for urgent needs, including defense, social protection and recovery.
A source at the Germany finance ministry welcomed the draft agreement and said it was a key step to preserve the Ukraine government’s ability to act and plan ahead.
The Ad Hoc Creditor Committee, which holds 22 percent of the country’s sovereign bonds, called the agreement “swift and constructive.”
“We are pleased to be able to provide significant debt relief to Ukraine, assist its efforts to regain its access to international capital markets, and support the future reconstruction,” it said in a statement.
RACING TO THE FINISH
Under the proposal, some of the new bonds issued would start paying a 1.75 percent coupon from next year, with payments stepping up to as much as 7.75 percent from 2034 onwards. Bondholders are also in line to receive a consent fee.
Interest payments had been a sticky issue in the talks. Bondholders sought financial inducement to agree to a rework, while Ukraine’s international partners such as Group of Seven nations and the IMF objected to large amounts of money being funnelled to private lenders and away from strained government finances.
Payments to bondholders under the deal would amount to less than $200 million through to end-2025.
While the bonds have a face value of $19.7 billion, Ukraine owes around $23 billion with past due interest.
The international bonds soared more than 5 cents after the announcement, with most maturities trading around the 35 cents mark and at their strongest in about two years.
Ukraine’s $2.6 billion GDP warrants — fixed-income instruments with payouts linked to the strength of economic growth — were not part of the restructuring, though the government said it would “ensure the fair and equitable treatment of holders of the Warrants.”
Bondholders will vote on the proposal in coming weeks. If enough sign off, the government will issue new bonds.
A first payment in the wake of the two year moratorium is due on Aug. 1, but Ukraine last week passed a law allowing it to miss payments — and enter debt default, even temporarily — while the agreement is finalized.
The debt deal would be Ukraine’s second in a decade triggered by its neighbor: Ukraine restructured in 2015 following Moscow’s annexation of Crimea.
“Once completed, this restructuring will also pave the way for Ukraine’s market re-entry as soon as possible when the security situation stabilizes to fund our country’s swift recovery and reconstruction,” Marchenko said in the statement.
Ukraine reaches preliminary deal with bondholder group on $20-billion debt restructure
https://arab.news/j9b3w
Ukraine reaches preliminary deal with bondholder group on $20-billion debt restructure
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- Ukraine’s finances are precarious as its 28-month war with Russia drags on. Russia’s 2022 invasion decimated its economy, leaving it heavily reliant on money – and military aid – from international partners
US sees potential Iran transfer of missiles to Russia as alarming
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- The potential moves come after the United States and partners, including in Europe, warned that such a step by Iran could meet with consequences
WASHINGTON: Any Iranian transfer of ballistic missiles to Russia would mark a sharp escalation in the Ukraine war, the United States said on Friday, following reports that the two countries had deepened ties in recent weeks with such an arms transfer.
Reuters reported in August that Russia was expecting the imminent delivery of hundreds of Fath-360 close-range ballistic missiles from Iran and that dozens of Russian military personnel were being trained in Iran on the satellite-guided weapons for eventual use in the war in Ukraine.
Short-range missiles have now been delivered to Russia by Iran, the Wall Street Journal reported on Friday, citing an unnamed US official.
“We have been warning of the deepening security partnership between Russia and Iran since the outset of Russia’s full-scale invasion of Ukraine and are alarmed by these reports,” said White House National Security Council spokesperson Sean Savett.
“Any transfer of Iranian ballistic missiles to Russia would represent a dramatic escalation in Iran’s support for Russia’s war of aggression against Ukraine.”
Another US official told Reuters they were watching the potential Iranian-Russian missile transfers closely.
The potential moves come after the United States and partners, including in Europe, warned that such a step by Iran could meet with consequences. The Western countries have been watching Iran and Russia’s deepening ties in recent months with increasing concern.
Iran’s mission to the United Nations in New York said on Friday that Tehran’s position on the Ukraine conflict was unchanged.
“Iran considers the provision of military assistance to the parties engaged in the conflict — which leads to increased human casualties, destruction of infrastructure, and a distancing from ceasefire negotiations — to be inhumane,” it said.
“Thus, not only does Iran abstain from engaging in such actions itself, but it also calls upon other countries to cease the supply of weapons to the sides involved in the conflict,” the mission said.
Austrian investigators seize devices at Munich shooter’s home
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- Authorities raided the gunman’s home in the Salzburg region, seizing electronic data carriers
- During the raid, “no weapons or Daesh propaganda” material were found
VIENNA: Investigators seized electronic devices at the home of a young Austrian who fired shots near Israel’s Munich consulate, but found no weapons or Daesh group propaganda material, authorities said Friday.
German police shot dead the 18-year-old man on Thursday when he fired a vintage rifle at them near the diplomatic building.
They said they were treating it as a “terrorist attack,” apparently timed to coincide with the anniversary of the killings of Israeli athletes at the 1972 Olympic Games.
Authorities raided the gunman’s home in the Salzburg region, seizing electronic data carriers, Austria’s top security chief Franz Ruf told a press conference in Vienna on Friday.
During the raid, “no weapons or Daesh propaganda” material were found, Ruf added.
Despite being subject to a ban on owning and carrying weapons, the man managed to purchase a vintage carbine rifle fitted with a bayonet with around “fifty rounds of ammunition” for 400 euros ($445) the day before the attack, Ruf said.
He opened fire at around 9:00 am (0700 GMT) near the Israeli consulate, sparking a mobilization of about 500 police in downtown Munich.
At a separate press conference in Munich, prosecutor Gabriele Tilmann said investigators were combing through the gunman’s electronic data but had yet to find conclusive evidence of his motive.
But the “working hypothesis” was that “the perpetrator acted out of Islamist or anti-Semitic motivation,” she told reporters.
Austrian police said on Thursday that the gunman, who had Bosnian roots, had previously been investigated on suspicion of links to terrorism.
Investigators last year found three videos he had recorded in 2021, showing scenes from a computer game “with Islamist content,” prosecutors said in a statement.
In one of them the suspect had used an avatar with a flag of the “al-Nusra Front,” a militant group active in Syria, said Ruf.
But the investigation was dropped in 2023 as there were no indications that he was active in “radical” circles, prosecutors said.
“The mere playing of a computer game or the re-enactment of violent Islamist scenes was not sufficient to prove intent to commit the offense,” they added.
Biden to host UK PM for talks next week, says White House
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- The visit comes after Biden’s July 21 decision to drop out of the 2024 US presidential election
- It was not clear if Starmer would also meet Harris on his trip to Washington
WASHINGTON: US President Joe Biden will host British Prime Minister Keir Starmer for talks next week that will focus on the wars in Gaza and Ukraine, the White House said on Friday.
Starmer’s visit to the White House on September 13, his second since taking office in July, will also focus on the “special relationship” between London and Washington, Press Secretary Karine Jean-Pierre said in a statement.
The visit comes after Biden’s July 21 decision to drop out of the 2024 US presidential election and pass the mantle as Democratic candidate to Vice President Kamala Harris.
It was not clear if Starmer would also meet Harris on his trip to Washington.
Biden and Starmer will discuss “continuing robust support to Ukraine in its defense against Russian aggression” and “securing a hostage release and ceasefire deal to end the war in Gaza,” said Jean-Pierre.
The US leader has been pushing for a truce to end Israel’s war on Hamas in the Gaza Strip before he leaves office, but the talks brokered by the United States, Egypt and Qatar have failed to produce an accord.
Ukraine meanwhile has captured a swath of Russian territory, but Moscow has hit back with advances in Ukraine’s east.
Biden and Starmer will also discuss attacks on shipping by Yemen’s Iranian-backed Houthi rebels and, in a reference to countering Chinese influence, ensuring a “free and open” Asia-Pacific region.
“President Biden will underscore the importance of continuing to strengthen the special relationship between the United States and the United Kingdom,” added Jean-Pierre.
Labor leader Starmer first visited the White House on July 10, just days after his election as British Prime Minister, while attending a summit of NATO military alliance leaders in Washington.
During their meeting in the Oval Office, Biden hailed Britain as the “best of allies” while Starmer reaffirmed Britain’s support for Ukraine as it battles Russia’s invasion.
Thailand’s king swears in new government after turmoil
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- Dressed in official uniform, Paetongtarn and her Cabinet ministers swore their allegiance in front of King Vajiralongkorn and Queen Suthida in a ceremony at Bangkok’s Dusit Palace
BANGKOK: Thailand’s King Maha Vajiralongkorn swore in Prime Minister Paetongtarn Shinawatra and 35 Cabinet ministers in Bangkok on Friday, ushering in a new government in Southeast Asia’s second largest economy after a period of political turmoil.
Paetongtarn, 38, leader of the ruling Pheu Thai party, was elected by parliament last month to become Thailand’s youngest prime minister after her predecessor Srettha Thavisin was dismissed by a court order over an ethics violation.
The Cabinet, which was formally endorsed by the king on Wednesday, comprises 17 members from Pheu Thai, including the premier, and another 19 positions divided among coalition partners.
Dressed in official uniform, Paetongtarn and her Cabinet ministers swore their allegiance in front of King Vajiralongkorn and Queen Suthida in a ceremony at Bangkok’s Dusit Palace.
“I want to wish, with gladness, that the Cabinet will have the encouragement and determination to perform your duties as you have sworn for the benefit of the country and people,” the king said after the Cabinet’s oath of allegiance.
Paetongtarn and the Cabinet ministers bowed after the king’s remark.
The youngest daughter of the divisive former premier Thaksin Shinawatra, Paetongtarn has not served in government previously and will face challenges on multiple fronts, including a floundering economy.
She is also the second woman and fourth member of the Shinawatra clan to hold Thailand’s top elected position, with three previous premiers removed by coups or court decisions.
Paetongtarn’s government will deliver its policy statement to parliament next Thursday and Friday, marking the formal start of her administration.
UK vows to smash gangs as courts jail people traffickers
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- Anas Al-Mustafa, originally from Syria, found guilty in August of assisting unlawful migration by trafficking seven people
LONDON: UK interior minister Yvette Cooper vowed Friday that her government “will not rest” until people-smuggling gangs are dismantled, following a series of shocking migrant incidents including a deadly boat wreck in the Channel.
Her comments came shortly after a van driver received a 10-year prison term for smuggling migrants in a secret compartment where they were found screaming for help and starved of oxygen.
Anas Al-Mustafa, 43, originally from Syria, was found guilty in August of assisting unlawful migration by trafficking the seven people in a specially adapted van.
Cooper spoke at a gathering of senior crime-fighting and intelligence officials that she chaired on Friday.
It came after at least 12 people perished trying to cross the Channel on Tuesday, when their small boat was ripped apart off the northern French coast.
Ahead of the summit, Cooper said that “exploiting vulnerable people is at the heart of the business model of these despicable criminal smuggling gangs.
“At least 12 people were killed as part of this evil trade. We will not rest until these networks have been dismantled and brought to justice.”
While much of the focus has been on crossings of the Channel by small boat, smugglers also use more traditional routes to move people from mainland Europe to the UK.
Al-Mustafa was caught when crew members on a car ferry between Dieppe in northern France and Newhaven on England’s south coast heard pleas from inside the van.
The six men and one woman were found crammed into an overheated concealed space described as no more than “the width of a human chest.”
Crew members used an axe to free the migrants by breaking down the fake partition.
By the time they were rescued two had lost consciousness. None of the migrants had been supplied with water, the court was told.
Prosecutors said that the younger migrants recovered from their dehydration but that one man had a possible heart attack, the woman suffered an acute kidney injury and another man went to hospital in a comatose state and suffered a stroke.
“Desperate people are prepared to risk their lives to come into the UK, often with tragic consequences,” judge Christine Laing said. “They are exploited by those who profit from this trade and pay little attention to their safety.”
Border Security and Asylum Minister Angela Eagle said the case underlined the need to dismantle the smuggling gangs.
“This evil criminal put seven people’s lives at risk for cash, it is a miracle they are still alive after the conditions they were put in,” she said in a statement.
In a separate case, a UK national who attempted to smuggle five migrants, including a five-year-old child, was jailed for three years after being found guilty of assisting unlawful immigration at trial.
Border Force officers caught Joshua Bynoe, 29, in Coquelles, France, as he drove his motorhome, in which five Afghan nationals were hiding, toward the UK.
Immigration was a major issue at the general election in July that brought Prime Minister Keir Starmer’s Labour party to power.
One of his first acts as prime minister was to abolish the last Conservative government’s plan to deport migrants to Rwanda as a deterrent to small boats crossings, calling it an expensive “gimmick.”
The Tories had spent £700 million ($900 million) on the scheme but only four migrants had relocated to Rwanda — and they went voluntarily, Cooper told parliament in July.
According to the latest UK government figures, 22,240 migrants have been detected and brought ashore so far this year.
There are also concerns about an increase in the size of boats being used to try to cross the busy shipping lane.