Ukraine imposes moratorium on debt payments to Russian Federation
Ukraine imposes moratorium on debt payments to Russian Federation
Prime Minister Arseny Yatseniuk said on Friday that Ukraine would not repay the Eurobond when it matures and that Kyiv was geared to fight the issue in court.
On Twitter, he added: “From now on payments of debts for the Russian Federation [will] stop, [until] the adoption of our proposals on restructuring, or [a] judicial decision”.
“We never said there were not people there who carried out certain tasks, including in the military sphere“, he said, the Guardian reports, when asked by a Ukrainian reporter about two Russian military officers captured by Kyiv and now on trial in Ukraine.
He said the IMF’s recent concerns about the Ukrainian parliament’s decision to reject a proposed budget for the next year and a new tax code could indicate a “growing risk that the country’s bailout could be put on hold”. The new Ukrainian government has said it would not repay the bond in full, and has encouraged Moscow to sign on to a deal reached with Kyiv’s private creditors in August.
Ukraine’s restructured dollar-denominated bonds stayed lower, with the yield on the debt due 2025 rising two basis points to 9.65pc by 12:05pm in Kyiv. Kyiv has a 10-day grace period to pay debt to Moscow after the late December deadline.
Moscow and Kyiv have been locked in a bitter showdown over a Russian $3 billion loan granted to the pro-Moscow regime of ex-president Viktor Yanukovych in December 2013, not long before he was ousted and fled to Russia. “Otherwise, a legal case would probably ensue, unnecessarily complicating the ongoing political discussions surrounding eastern Ukraine and the sanctions”.
Speaking on 17 December during his annual end-of-the-year press conference in Moscow, Putin insisted that these were “military specialists” and not regular Russian troops. That deal involves a 20 percent write-down of bond holdings, which cut Ukraine’s sovereign debt from $19 billion to $15.5 billion.
William Jackson, an emerging markets analyst at Capital Economics, said the implications of the moratorium were unclear.