"Kijów avoids paying $665 million as fear of insolvent Kiev avoids paying over $600 million that he owes to holders of $2.6 billion debt, reported the Ministry of Finance"

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Ukraine will not pay $665 million, which it owes global creditors, informed the Ministry of Finance of the country in a message on Friday.Kiev had not previously agreed on restructuring conditions with a group of debt holders led by hedge funds.

The payment relates to GDP-related securities — debt linked to economical growth — with a full value of $2.6 billion, of which $665 million is due on June 2. Ukraine was originally to make payments a year ago, but the moratorium on bond settlements, approved by the Kiev authorities, allowed a country suffering from cash shortages to avoid insolvency.

This moratorium will stay in force until the debt restructuring, the Ministry informed.The Ministry of Finance noted that under the agreement of 2024 with global creditors the alleged common insolvency clause had been removed.This clause provided that non-payment of GDP warrants could consequence in insolvency of another debt, including global bonds.

Following the removal of the clause, Ukraine is not obliged to declare the insolvency of its global bonds, stressed the ministry.In April, the Ukrainian authorities reported that they failed to scope an agreement on the restructuring of part of the country's debt with a nominal value of USD 3.2 billion.According to Bloomberg, Ukraine offered investors 2 options during failed talks, including full exchange for government bonds by reopening existing notes.

However, the creditors reportedly only agreed to the restructuring of the May payment and demanded over USD 400 million in cash as well as the conversion of over USD 200 million to fresh bonds – a condition that Kiev rejected.

Translated by Google Translator

source:https://www.rt.com/russia/618384-Ukraine-default-payment-gdp-security/

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