Investors could early call for paying GDP-pegged VRI if Ukraine violates covenants

After receiving value recovery instruments (VRI) pegged to the GDP pace investors could call them for payment if Ukraine violates the covenants for the securities.

According to the presentation published on the Finance Ministry's website, the ground for the offer is the repeated imposing of the moratorium on payments on eurobonds until December 21, 2018, the court ruling on violation of some covenants on VRIs or the payment of compensation for the relevant infringement by the country.

Covenants on VRI mainly concern the provision of all guarantees and rights of investors by the country foreseen on the above-mentioned securities and require the timely publication information required for calculation of payments on VRI and retaining of access to credits from the International Monetary Fund (IMF) by the country.

The securities will be paid at the notional value.

VRIs are issued in the amount of the face value of sovereign eurobonds that are written down. According to the presentation, investors, who would not take part in the debt transaction, would not receive VRIs.