Arab Today, arab today ukraine anticipates defaultsaving debt deal
Last Updated : GMT 16:29:31
Arab Today, arab today
Arab Today, arab today

Ukraine anticipates default-saving debt deal

Arab Today, arab today

Arab Today, arab today Ukraine anticipates default-saving debt deal

The possibility of Ukraine either outright defaulting
Kiev - AFP

Ukraine was expecting the announcement on Friday of a crucial debt restructuring agreement that could save the pro-West but strife-torn country from a devastating default.

Five months of excruciating negotiations between Kiev's cash-strapped leadership and some of the world's biggest commercial creditors have reached the finishing line with the outcome still in serious doubt.

At issue is both a debt burden of around $19 billion and the very economic future of Ukraine -- a vast former Soviet republic straddling the diplomatic no-man's-land between the European Union and an increasingly assertive Russia.

The possibility of Ukraine either outright defaulting on its obligations or imposing a payment freeze could shut Kiev out of global borrowing markets and severely hamper its IMF-led austerity and economic restructuring drive.

The International Monetary Fund has patched together a $40 billion (35.8 billion euro) rescue package that could wean Ukraine off its reliance on Russia and turn it permanently toward the West.

But that deal includes finding a compromise with bondholders which could save the nation of about 40 million people $15.3 billion over the next four years.

Franklin Templeton and three other financial titans that own $8.9 billion of that sum believe Ukraine is in strong enough shape to repay the debt in full and more or less on time.

The four have rejected Kiev's request to accept a 40 percent cut to their Eurobonds' face value and instead offered a conditional write-down or "haircut" of between 5.0 and 10 percent.
What Kiev described as the "final" round of discussions between US-born Ukrainian Finance Minister Natalie Jaresko and Templeton managers at their home base near San Francisco concluded without a deal.

But several sources with knowledge of the negotiations said a major debt announcement of some sort would finally be made on Friday.

Economists agreed that the time for such a breakthrough could hardly be more rife.

"Some agreement should be reached this week," Dragon Capital economist Olena Bilan told AFP.

- Sweeteners and threats -

Time is of the essence because the IMF's support package requires Kiev to restructure a $500 million Eurobond that matures on September 23.

Talks however with all of Ukraine's investors -- stipulated to take no more than three weeks -- cannot effectively begin until terms with the Templeton-led group are reached.

Jaresko has warned repeatedly that Ukraine could impose a repayment moratorium as early as this week.

The decision would save Kiev $60 million in interest payments that come due on Sunday. Yet it would also find the government possibly facing lawsuits and push its borrowing costs out of reach.
The IMF and Washington have both pressed the creditors to accept some short-term losses to help the strategic east European nation to stand up to Russian "aggression" and eventually become a full member of the European Union.

But economists said a workable compromise would probably see investors accepting a rather severe "haircut".

"The fair value of Ukrainian bonds is closer to 46 cents per dollar, versus the current 58 cents, which would imply a 35-percent haircut, an eight-year maturity extension and a four-percent coupon reduction," Oxford Economics researcher Evghenia Sleptsova told AFP.

Some said they expected the two sides to agree somewhere in the middle -- a big write-down that included "sweeteners" such as a promise by Kiev to pay back more should its economy perform better than expected next year.

"We maintain our view that Ukraine will press the creditors for a nominal haircut of at least 25 percent," said Kiev's ICU Group analyst Alexander Valchyshen.

Yet not everyone was as optimistic. Sleptsova of Oxford Economics said "it may well take a (repayment) moratorium by Kiev for the compromise to be reached."

"The government may be tempted to try its luck and announce a moratorium and then soften its position if the impact on the economy turns out to be dramatic."

 

arabstoday
arabstoday

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today ukraine anticipates defaultsaving debt deal Arab Today, arab today ukraine anticipates defaultsaving debt deal

 



Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today ukraine anticipates defaultsaving debt deal Arab Today, arab today ukraine anticipates defaultsaving debt deal

 



Arab Today, arab today
Arab Today, arab today Youssra depended on colored foam

GMT 16:53 2017 Tuesday ,05 September

Youssra depended on colored foam
Arab Today, arab today Taxi! Transport gets an overhaul

GMT 12:09 2017 Sunday ,24 September

Taxi! Transport gets an overhaul
Arab Today, arab today Etiquette expert underlines importance of gifts

GMT 17:52 2017 Sunday ,03 September

Etiquette expert underlines importance of gifts
Arab Today, arab today Turkey warns of 'security' steps

GMT 12:17 2017 Sunday ,24 September

Turkey warns of 'security' steps
Arab Today, arab today North Korea 'more opaque'

GMT 10:50 2017 Sunday ,24 September

North Korea 'more opaque'
Arab Today, arab today
Arab Today, arab today
Arab Today, arab today Ministry seeks to improve education

GMT 14:49 2017 Sunday ,17 September

Ministry seeks to improve education
Arab Today, arab today 'Lady Beast' fights for girl gamers

GMT 10:27 2017 Sunday ,24 September

'Lady Beast' fights for girl gamers
Arab Today, arab today Psychologists help Mexico deal

GMT 05:05 2017 Sunday ,24 September

Psychologists help Mexico deal
Arab Today, arab today The history of solar eclipses

GMT 05:16 2017 Sunday ,20 August

The history of solar eclipses
Arab Today, arab today Third generation adds more power

GMT 13:40 2017 Sunday ,24 September

Third generation adds more power
Arab Today, arab today Carmakers face billions in European

GMT 12:37 2017 Saturday ,23 September

Carmakers face billions in European
Arab Today, arab today Lebleba is preoccupied in filming 'Back Street'

GMT 08:56 2017 Thursday ,21 September

Lebleba is preoccupied in filming 'Back Street'
Arab Today, arab today Big Western brands polluting oceans

GMT 20:10 2017 Saturday ,23 September

Big Western brands polluting oceans

GMT 08:59 2017 Wednesday ,20 September

Youssra prepares for launching her program

GMT 10:16 2017 Friday ,22 September

All eyes on May as she prepares

GMT 16:53 2017 Saturday ,02 September

Mai importance of gifts during Eid Al-Adha

GMT 12:01 2017 Wednesday ,20 September

Puerto Rico, Virgin Islands brace

GMT 10:46 2017 Saturday ,05 August

Nanis reveals simple ideas for home renovation

GMT 18:11 2017 Saturday ,23 September

Doctor provides advices to families

GMT 13:36 2017 Saturday ,23 September

unveils Joon - the 'millenials' airline

GMT 17:12 2017 Monday ,07 August

Al-Shawaifi reveals secrets of total solar eclipse

GMT 12:46 2017 Thursday ,21 September

Google likely to buy stake in Taiwan smartphone maker HTC

GMT 11:37 2017 Saturday ,12 August

Fashion designer reveals her new collection
Arab Today, arab today
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube
arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday