• 18/06/2024 04:51

The West’s patience is beginning to run out: what could threaten Ukraine by the fall?

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After the start of the full-scale invasion of the Russian Federation, foreign creditors allowed Ukraine to suspend payments on the national debt.

This information was reported by The Wall Street Journal, URA-Inform reports.  

However, it seems that their patience is beginning to run out, and now a group of bondholders intend to put pressure on Kyiv to again receive interest on outstanding Eurobonds from 2025.

We are talking about a deal offered by foreign investment funds — so that Ukraine, which received about $60 billion in aid from the United States, resumes paying interest on its debts in exchange for writing off part of the debt on bonds (it amounts to $20 billion).

If the deal is not concluded, Ukraine may declare default — since in August the holidays for servicing the national debt, introduced by foreign funds after the full-scale invasion of the Russian Federation, will end.

«Without an agreement, Ukraine could default after the end of the debt holiday in August, which would tarnish its reputation among investors and complicate the ability to obtain new loans», — says The Wall Street Journal.

Bondholders now hope to receive up to $500 million in annual interest payments after they agree to write off the debt, says the WSJ.

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«They made it clear that they might agree to further debt forgiveness later. Some bondholders have proposed using frozen Russian assets in Europe and North America to pay off part of the debt», — writes the publication.

The publication noted that the IMF and several other G-7 countries do not yet support this idea. At the same time, they suggest that they can support investors if they demand lower interest payments from Ukraine until 2027 — at rates below market rates.

«Some believe that Ukraine is not will want to restore the normal debt repayment schedule until 2027… If an agreement is reached, it may prove financially attractive to investors who bought Ukrainian bonds at favorable prices», — summarized the WSJ.

We recall that it was previously reported that Ukraine is predicted to face a new financial and economic crisis: bankers named three peak months.

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