Ukraine Faces Key Test on Debt Freeze Plan in Bid to Avoid Messy Default

Ukraine's creditors vote this week on a government proposal to defer payments on the war-torn country's international bonds for 24 months as Kyiv hopes to swerve a $20 billion messy default, Reuters reported. Bondholders have until 5 p.m. New York time (2100 GMT) on Tuesday to decide whether to back or vote down the proposal by Ukraine's government, which faces a $5 billion monthly financing gap and liquidity pressures following Russia's invasion on Feb. 24. Time is precious: the country has a $1 billion bond maturing on Sept. 1. Creditors will likely wait until relatively close to the deadline to vote. Investors are expected to support the debt standstill. When announcing its proposal, Ukraine's finance minister Sergii Marchenko said that it had "explicit indications of support" from some of the world's biggest investment funds including BlackRock, Fidelity, Amia Capital and Gemsstock. Creditors of Ukravtodor and Ukrenergo, two state-owned firms that have government guarantees on their debt, also have until Aug. 9 to vote on a plan similar to the sovereign. Read more.