The restructuring of Ukraine's external debt, including Eurobonds, is due to be completed in the coming days, and despite the fact that the terms have been agreed upon by the creditors' committee and the Ministry of Finance, an unexpected problem has arisen that concerns the Ukrainian holders of these bonds.
Despite the fact that the restructuring seemed predictable and prepared, a situation has arisen that could seriously affect small Ukrainian investors. It turned out that to participate in the vote on the restructuring of Eurobonds, it is necessary to have a minimum lot, which for this market is $100 thousand or $200 thousand depending on the issue. Many Ukrainian investors own bonds in volumes smaller than this minimum, and therefore cannot vote.
This problem arose because before the start of the full-scale war with Russia, many Ukrainians purchased Eurobonds in small amounts, which was made possible by the policy of the National Bank of Ukraine. However, given Russia's aggression and the market decline, the situation has changed, and now Ukrainian investors are facing problems they could not have foreseen.
The terms of the bond restructuring, including the minimum voting lot requirements, were not taken into account during the preparation of the restructuring. As a result, retail investors, who may be a significant part of the market but whose Eurobond holdings are relatively small, are unable to participate in the important voting process.
This could lead to increased debt write-offs for those who were unable to vote, and create additional difficulties for the Ministry of Finance and the National Bank of Ukraine. While this is unlikely to have major consequences for the restructuring itself, it could be quite difficult for small investors.
A possible solution could be a vote at the level of the National Bank of Ukraine, which could vote for all Ukrainians together. However, it is not yet known whether the regulator will agree to such a proposal. This situation is another reminder that investments in Ukraine can be unpredictable, and even international norms and rules do not always guarantee fairness for all market participants.
Apart from this issue, the domestic and foreign markets remain quite stable. Warrants were traded more in the foreign market, the hryvnia showed moderate fluctuations, and domestic rates remained stable. Inflation in Ukraine continues to rise, reaching 5.4%, and this may have further consequences for the economy.
The data on consumer sentiment among Ukrainians, which improved in July, even despite the power outage, is somewhat surprising. Perhaps the improvement in sentiment is related to the recent events in Kursk, which could also have a positive impact on the perception of the situation in Ukraine.
