10:24 19.11.2015

IMF hopes Russia and Ukraine to start direct talks on $3 bln debt restructuring

2 min read
IMF hopes Russia and Ukraine to start direct talks on $3 bln debt restructuring

The International Monetary Fund (IMF) expects that Russian and Ukrainian authorities will begin direct talks on restructuring of Ukraine's eurobonds worth $3 billion due in late December 2015.

"In the recent meeting between Russian President Vladimir Putin and Managing Director Christine Lagarde, the Russian authorities outlined a proposal for how to relieve the debt and financing situation of Ukraine in the context of the fund supported program. As we have said, we expect the Russian and Ukrainian authorities to conduct direct discussions on this matter," the press service of the IMF told Interfax-Ukraine.

As reported, Putin on November 16 after the G20 forum in Antalya proposed that Ukrainian repay the $3 billion in eurobonds that Russia bought over a period of three years: $1 billion in each of 2016, 2017 and 2018.

He said the IMF had tried to persuade Russia to reschedule payment on Ukraine's debt to 2016.

In October, the holders of Ukraine's other 13 eurobond issues, totaling $14.36 billion and 0.6 billion euro, approved a debt restructuring deal. Russia, which holds $3 billion in eurobonds purchased using money from the National Welfare Fund (NWF) in late 2013, just before the ouster of Ukraine's previous leadership. Until today, Russia maintained that the eurobonds constituted sovereign debt that must be repaid in full in December and vowed to go to court if the debt was not repaid.

Ukrainian Prime Minister Arseniy Yatseniuk has repeatedly said Kyiv is ready for litigation with Russia over its refusal to accept the terms of the restructuring agreed with Ukraine's other creditors.

The IMF, whose current rules prohibit it from providing funding to a country that refuses to service official debts, is also planning to examine the debt classification issue.

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