Russia Will Take Ukraine to Court If June Coupon Date Missed
by Natasha DoffOlga Tanas
7:28 AM EDT
May 20, 2015
Russia said it will take Ukraine to court if the government in Kiev fails to make its next coupon payment after passing a law allowing it to stop servicing its debt.
“In June, a $75 million payment is due,” Finance Minister Anton Siluanov told reporters in Moscow on Wednesday. “We’ll see, if they miss the payment, we will use our right to go to court.”
Ukraine has failed to bring Russia to the table as it begins negotiating with creditors to reduce its $23 billion of international debt. Russia says the $3 billion bond that comes due in December shouldn’t be included in the restructuring because it was bought from the regime of former Ukrainian President Viktor Yanukovych as part of a government aid agreement.
Ukraine raised the pressure on creditors to accept a writedown on their holdings on Tuesday when it passed a bill enabling the government to halt payments if it can’t reach agreement with bondholders by its June 15 target. Failure to cut a deal risks future tranches of a $17.5 billion International Monetary Fund loan that Ukraine needs after a conflict with pro-Russian separatists pushed it into the worst recession since 2009.
“If Russia takes Ukraine to court, that might be an incentive for other creditors to go down the same route,” Jakob Christensen, an economist at Exotix Partners LLP in London, said by phone on Wednesday. “I would wait until after June 20 to go forward with” any moratorium, he said.
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http://www.bloomberg.com/news/articles/2015-05-20/russia-will-take-ukraine-to-court-if-june-coupon-payment-missed
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