Tuesday, February 3, 2015

Ukraine Debt Situation Unresolved

Originally, the IMF had intended to announce a new aid/debt package for the Ukraine at the end of January. The IMF then announced that their team in the Ukraine had to extend their visit. Today, this article on Moneyweb say the Ukraine has not yet come to terms with the IMF and is hinting its bond holders may be asked to take a hit. 


Ukraine has been pushed close to bankruptcy by a widening conflict

"Ukraine will hold talks with its sovereign bondholders only after it concludes discussions with the IMF about a new financing package, Kiev's finance minister said on Tuesday."

"Ukraine has been pushed close to bankruptcy by a widening conflict with pro-Russian separatists and has asked for an extension in foreign aid, including from the IMF, to plug an estimated $15 billion funding gap."

"We have not started those consultations yet (with sovereign bondholders)," Finance Minister Natalie Jaresko said on a call with reporters. "We will start them after we've completed our negotiations with the IMF because the parameters of the situation will be clearer once we've come to an agreement."

"At meetings in Davos last month, she said Kiev plans to talk with holders of its sovereign debt with a view to improving debt sustainability, without elaborating further. The comments were widely seen as a call for creditors to write down some of Ukraine's estimated $70 billion debt."
My  added comment:  

Questions of the Day - Who buys these bonds? Why would they keep doing so?

Updates: Some new articles out on the situation 



Sputnik News

Bloomberg    - IMF wants to limit its risk in the Ukraine


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