Kiev avoids USD665 million payment as default concerns increase
(MENAFN) Ukraine will not make a scheduled $665 million payment to international creditors, its Finance Ministry announced on Friday. The payment, part of a larger $2.6 billion in GDP-linked securities, was due on June 2. This move comes after Kiev failed to reach a restructuring deal with a group of investors led by hedge funds.
Originally due in 2023, the payment had been postponed under a moratorium imposed by Ukrainian authorities, allowing the financially strained nation to avoid default. That moratorium remains active until new terms are agreed upon, according to the ministry.
Ukraine also pointed out that a 2024 agreement with international creditors eliminated a cross-default clause, which previously could have triggered a wider default if the GDP-linked payment was missed. With that clause removed, the country is not obligated to declare a default on other international bonds.
In April, Ukrainian officials disclosed that talks to restructure $3.2 billion of the country’s debt had collapsed. According to Bloomberg, Ukraine had proposed two options, including swapping the securities for sovereign bonds by reopening existing ones. However, creditors insisted on over $400 million in cash and the conversion of more than $200 million into new bonds—terms Kiev declined.
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