Kiev stops debt payments, faces technical default
Ukraine says it will halt paying off its external debt on Wednesday, facing the risk of a technical default. The list of non-payments doesn’t include the $3 billion owed to Russia. The debt to Moscow is due in December which Russia has insisted it wants in full.
According to a document published on the website of the Ukrainian government, the restructuring applies to the $3 billion Eurobonds purchased by Russia. However, payments on them have not been suspended.
The list included seven issues of Ukrainian government bonds.
Russia not a hedge fund - Ukraine should pay debt in full - Finance Minister http://t.co/UqIsOLn7Erpic.twitter.com/VtEUsgrLFY
— RT (@RT_com) September 7, 2015
"We are talking about restructuring $15 billion, agreed by 13 of 14 Ukrainian creditors. Russia didn’t accept the haircut and, therefore, its $3 billion is not included,” said an expert polled by Russian business daily Kommersant.
READ MORE: Some of Kiev’s Western creditors refuse haircut
Kiev has stressed that Moscow will not get more favorable terms than other creditors.
The Kremlin recently responded: “The so-called debt operation, which Russia takes no part in, cannot ease Ukraine’s debt burden. It is in the debtor’s best interests to pay back the Russian Federation immediately, as a default on these liabilities will turn out much more expensive for Ukraine, which will have to pay both litigation costs and penalty interest for overdue payments.”
#Kiev pays for Russian gas with ‘negotiations’ – #Ukraine finance minister http://t.co/H9ikCaYMIepic.twitter.com/g2yOVGLRZA
— RT (@RT_com) September 22, 2015
Ukraine is obliged to restructure its multibillion dollar debt in order to receive a $17.5 billion loan from the IMF. The lack of an agreement with Russia, one of Ukraine’s biggest creditors, thwarts the deal.