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Dealwatch: Weil and White & Case lead on Ukraine’s $18bn debt restructure

London teams at Weil, Gotshal & Manges and White & Case were selected as the lead advisers as Ukraine struck a debt-relief deal yesterday on its $18bn sovereign debt pile in a bid to rebuild its fragile economy.

The eastern European nation, home to 45 million people, has sealed an agreement with its creditors to cut up to 20% of its outstanding sovereign debt and extend its repayment period. The haircut on the 14 sovereign and sovereign-guaranteed Eurobonds could be worth up to $3.6bn, with creditors agreeing an upside if the country’s GDP growth recovers between 2021 and 2040.

The arrangement to lower its debt costs saw Weil advise the ad hoc creditors’ committee, which contains Franklin Advisers, BTG Pactual Europe, TCW Investment Management Company and T Rowe Price Associates, on the deal that will allow recession hit Ukraine to fulfil the terms of its International Monetary Fund bailout agreed in March.

The Weil team was led by former Goldman Sachs European head Andrew Wilkinson and restructuring partner Alex Wood in London. The pair fielded an 11-lawyer team on the deal, with City restructuring partner Paul Bromfield, disputes partner Jamie Maples, European high-yield head Patrick Bright and capital markets partner Todd Chandler all working on the restructuring.

One of the biggest debt restructurings carried out by a European government in the last decade, White & Case was selected as international legal counsel by the government with a team led by London-based capital markets partner Ian Clark. Support came from partner Michael Doran, who is well known for his work on the €206bn restructuring of Greek sovereign debt in 2012, and partner Francis Fitzherbert-Brockholes.

Ukraine’s finance minister, Natalie Jaresko, said: ‘This agreement is a very important milestone for Ukraine. It is the outcome of negotiations that were difficult but conducted in good faith. Ukraine gets a very immediate and very significant debt reduction worth up to $3.6bn while maintaining its status in capital markets, a significant plus for our economy and our banking system. We get some $11.5bn financing for our IMF-supported programme, giving us the necessary financial breathing space. Importantly, we align our interests with our creditors.’