Kyiv City Council has approved the conversion of Kyiv's eurobond debt from municipal debt into state debt.

A total of 79 council members approved the decision at a meeting of the council on Thursday.

The term for outstanding Eurobonds has been extended by four years as part of the conversion: until 2019 for bonds due in 2015, and until 2020 – for bonds due in 2016.

The interest rate for both bond issues is set at 7.75% per annum.

A writedown of 25% of the principal of the bond debt is foreseen.

Investors who approve the bond restructuring will receive government derivatives. The accrued interest rate will be capitalized and returned as government derivatives.

Chairman of the commission for budget, social and economic development at the Kyiv City Council Andriy Strannikov said that the conditions were unanimously supported by the budget commission of the council and agreed with the creditors.

"The decision on the moratorium is still in effect, but we add amendments which were actually agreed with creditors," he said.

The conditions of the Kyiv's bond conversion approved on Thursday meet the conditions of Ukraine's sovereign bonds restructuring, apart from the fact that the immediate writedown of 20% is foreseen for Ukraine after the completion of the deal.