Ukrzaliznytsia temporarily suspends coupon payments on Eurobonds: what is the reason?
10 January 09:15
Ukrzaliznytsia JSC is temporarily suspending coupon payments on Eurobonds in order to maintain the company’s liquidity and ensure the smooth operation of rail transport and the payment of salaries to employees.
This was reported by "Komersant Ukrainian" with reference toUkrzaliznytsia.
The company notes that against the backdrop of a full-scale war, Ukrzaliznytsia’s financial condition has significantly deteriorated. The total amount of debt on Eurobonds placed in 2019 and 2021 exceeds $1 billion, of which more than $700 million is due for repayment in July 2026.
Among the key reasons for the suspension of debt servicing, the company cites the continuing decline in freight traffic. In 2025, revenues from this segment are expected to decline by approximately 17% compared to 2024, while tariffs remain unchanged since 2022 and industrial inflation is extremely high.
Additional pressure is being exerted by intensified Russian attacks on railway infrastructure—in 2025, 1,195 attacks were recorded, which is more than in 2023–2024 combined. This has led to increased costs for repairing damaged infrastructure, rolling stock, and property, as well as higher prices for energy resources and materials.
Ukrzaliznytsia also draws attention to the chronic unprofitability of passenger transportation. The cumulative losses of this segment in 2025 significantly exceeded the amount of support from the state budget, while passenger transportation tariffs have not changed since 2021.
The company emphasizes that despite its critical financial situation, in 2025 it made significant efforts to service Eurobonds in order to maintain constructive relations with investors. At the same time, resources are currently being directed towards urgent needs — ensuring the stability of the railway system in the face of constant attacks, purchasing fuel and electricity, forming reserves for rapid recovery, and paying salaries to railway workers.
Ukrzaliznytsia, with the participation of financial advisors, is working on a strategic solution and is counting on constructive negotiations with Eurobond holders to reduce the debt burden within the limits of possible restructuring.
At the same time, the company emphasizes that it continues to fully fulfill its obligations that are critical to the country’s defense capability and continuity of transportation, as well as servicing its financial obligations to international partners who provide preferential financing to support operations and restore infrastructure after Russian attacks.
