Washington urges Moscow to accept restructuring Ukraine debt

AFP, KIEV:  The United States on Friday urged Russia to accept a partial loan write-off for Ukraine after Moscow held out on a vital debt restructuring agreement. In mid-October, Ukraine reached a deal with its private creditors to write down $3.6 billion and restructure future debt worth $8.5 billion. The crisis-torn nation also offered Moscow the same 20-per cent debt cut condition regarding its $3.0 billion (2.6 bn euros) loan given to former Ukraine president Viktor Yanukovych just months before his ousting in February 2014.  "We strongly have urged Russia to participate along with other bondholders in that agreement," US Treasury Secretary Jacob Lew said at a joint press conference in Kiev with Ukrainian Prime Minister Arseniy Yatsenyuk and Minister of Finance Natalie Jaresko. "It was done on the basis that treated all bondholders equally," Lew said.
"I think that the challenge of how to deal with the situation is really going to depend a lot on how Russia responds." But Russia views the bond as a sovereign loan that is not subject to the commercial terms agreed with Western funds and it has even threatened to file a lawsuit against Kiev.
On Friday, Yatsenyuk reiterated that Kiev will not pay up if Moscow continues to reject its offer of a deal.  "The Russian Federation will not have better conditions. If Russia does not agree, the government will impose a moratorium on the repayment of the debt," he said. A default on the Russian debt could complicate the release of further assistance of $17.5 billion granted to Kiev by the International Monetary Fund. The IMF is expected to rule in the coming months on whether Kiev or Moscow is right about the commercial or sovereign nature of the disputed loan.

 

Washington urges Moscow to accept restructuring Ukraine debt

AFP, KIEV: The United States on Friday urged Russia to accept a partial loan write-off for Ukraine after Moscow held out on a vital debt restructuring agreement. In mid-October, Ukraine reached a deal with its private creditors to write down $3.6 billion and restructure future debt worth $8.5 billion. The crisis-torn nation also offered Moscow the same 20-per cent debt cut condition regarding its $3.0 billion (2.6 bn euros) loan given to former Ukraine president Viktor Yanukovych just months before his ousting in February 2014. We strongly have urged Russia to participate along with other bondholders in that agreement, US Treasury Secretary Jacob Lew said at a joint press conference in Kiev with Ukrainian Prime Minister Arseniy Yatsenyuk and Minister of Finance Natalie Jaresko. It was done on the basis that treated all bondholders equally, Lew said. I think that the challenge of how to deal with the situation is really going to depend a lot on how Russia responds. But Russia views the bond as a sovereign loan that is not subject to the commercial terms agreed with Western funds and it has even threatened to file a lawsuit against Kiev. On Friday, Yatsenyuk reiterated that Kiev will not pay up if Moscow continues to reject its offer of a deal. The Russian Federation will not have better conditions. If Russia does not agree, the government will impose a moratorium on the repayment of the debt, he said. A default on the Russian debt could complicate the release of further assistance of $17.5 billion granted to Kiev by the International Monetary Fund. The IMF is expected to rule in the coming months on whether Kiev or Moscow is right about the commercial or sovereign nature of the disputed loan.