Ukrainian Finance Minister Natalie Jaresko, has agreed with a creditor committee led by Franklin Templeton (which owns about $7 billion of Ukrainian bonds) on a 20 percent write-down of about $18 billion worth of Eurobonds, the first of which mature in less than a month.
Russia won’t participate in Kiev’s debt restructuring, said Russian Finance Minister Anton Siluanov after the news broke.
Ukrainian Prime Minister Arseny Yatsenyuk said that Russia didn’t accede to the creditors’ committee and wouldn’t receive better terms than the other lenders under any circumstances.
Ukraine has been negotiating the restructuring of its debt since March. The country has repeatedly warned about the possibility of a moratorium on foreign debt payments if creditors didn’t agree to the restructuring, including a write-off of about 40 percent.
Bloomberg forecasts Ukraine’s economy is expected to contract 8.7 percent this year.