Michael Jacobs, Senior Counsel in Locke Lord’s London office, was quoted by International Financial Law Review (IFLR) on the feasibility of a restructuring of Ukraine’s sovereign debt. Jacobs notes legal challenges are unlikely given the considerable international goodwill towards the country and the precedent set by its 2015 restructuring.
“It would be surprising if a meaningful number of creditors tried to cause serious obstructions to any restructuring action,” Jacobs said.
He also notes even though a Ukrainian debt restructuring is increasingly likely given the circumstances, restructuring won’t occur anytime soon.
“Usually when a state restructures its debt, there’s a clear turnaround plan, such as economic targets and a timetable of anticipated milestones,” Jacobs notes. “At this stage, you can’t have a plan because there’s so much uncertainty on what the situation in Ukraine will be in six or twelve months. That being said early engagement with creditors, especially amidst uncertainty, is important in any restructuring.”
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