Ukraine

Ukraine on Tuesday expressed confidence it would complete a debt restructuring to clear the way for fresh IMF aid next month after state-run Ukreximbank tied up a deal with a bondholders' committee to extend maturities on $1.5 billion of Eurobonds, Reuters reported. Near-bankrupt Ukraine is holding talks to restructure sovereign and state-guaranteed debt to plug a $15.3 billion funding gap required under an International Monetary Fund-backed $40 billion bailout programme.

Russia on Wednesday demanded the timely repayment of all debts owed to it by Ukraine and accused Kiev of effectively preparing the way for default with a new law. It threatened to take the issue to international courts if necessary. The law, approved by Ukraine's parliament on Tuesday, gives the government the right to miss payments to its international creditors as it wrangles over the terms for restructuring $23 billion worth of foreign debt. Russia holds a $3 billion Ukrainian Eurobond whose full repayment is due by the end of the year.

Ukraine’s parliament passed a bill Tuesday allowing the government to halt payments on some foreign debts, raising the stakes as a deadline looms in rescheduling talks with international creditors, The Wall Street Journal reported. The measure, approved in a 246-4 vote hours after it was first proposed, comes amid tough talks with creditors over restructuring debts, a key measure demanded by the International Monetary Fund as part of a $17.5-billion lending program. The bill requires the signature of President Petro Poroshenko to take effect.

Ukrainian Finance Minister Natalia Yaresko said in a German newspaper interview that Kiev's foreign lenders should agree to a debt restructuring for the sake of German taxpayers. "The German taxpayers who are financially supporting us via national assistance loans and via the EU have a right for private creditors to share the costs by means of a debt restructuring," she said in an advance extract of an interview due to be published in Handelsblatt on Monday.

Ukraine’s $23bn debt restructuring negotiations appeared to reach boiling point late on Tuesday after the government issued a sharply worded statement that questioned the transparency, responsiveness and good faith of a creditors’ committee, the Financial Times reported.

Ukraine has to generate $15.3 billion over four years with the help of a debt restructuring plan agreed upon last March, with the International Monetary Fund (IMF). The IMF, which approved a new $17.5 billion loan for Ukraine and issued the first $4.9 billion tranche, expects that Ukraine and its creditors will agree on the terms of Ukraine’s commercial debt restructuring before the IMF’s review of the assistance program, scheduled for June, IMF First Deputy Managing Director David Lipton said in a recent statement (UNIAN, April 14), The Ukrainian Weekly reported.

Ukraine has cleared the first hurdle in a $15bn bid to avoid financial collapse. Investors in Ukreximbank, the state-owned lender, voted on Monday to extend repayment of a bond that is included in a plan to restructure the country’s debt and shore up its fragile finances, the Financial Times reported. The deal raised hopes that Kiev will now be able to reach a deal with the rest of its creditors. Ukreximbank’s $750m bond is the first due for repayment out of 29 bonds and loans that Ukraine hopes to renegotiate over the next four years.

Ukraine plans to tell investors on Friday that it will allow a state-owned bank to default unless a deal with creditors can be agreed as the embattled country takes an ever tougher approach to debt negotiations, the Financial Times reported. While attending International Monetary Fund meetings in Washington, Ukraine’s minister of finance Natalie Jaresko will probably say that a three-month extension on debt issued by Ukreximbank is crucial to the success of the country’s sovereign-debt restructuring.

Ukraine Finance Minister Natalie Jaresko has a warning for creditors of the war-torn country: Come to the table now to restructure $40 billion in debt or face the risks of an uncertain economic, political and military climate down the road, The Wall Street Journal reported. The American-born finance chief, in an interview, said that if creditors don’t emerge and begin earnest and transparent negotiations on the debt before a deadline for an agreement at the end of May, they could face a series of risks to Ukraine’s stability.

Investors holding $10 billion of Ukrainian debt have joined forces to develop a restructuring plan for the country’s debt that won’t involve a reduction in the principal value of the bonds, according to financial and legal advisers of the group, The Wall Street Journal reported.