Ukraine Rejects Debt to International Creditors
(MENAFN) Ukraine’s Finance Ministry announced on Friday that the country will not pay the USD665 million it owes to global creditors.
Previously, Kiev was unable to reach an agreement on restructuring terms with a coalition of debt holders, mainly led by hedge funds.
The payment in question relates to GDP-linked securities — debts connected to the country’s economic growth — which amount to USD2.6 billion in total, with USD665 million scheduled for payment on June 2.
Initially, Ukraine was supposed to make this payment a year ago, but a moratorium on bond payments, sanctioned by the authorities in Kiev, enabled the financially strained nation to avoid defaulting.
According to the ministry, this moratorium will continue until the debt is formally restructured.
The Finance Ministry also highlighted that as part of a 2024 pact with international creditors, the cross-default clause was eliminated.
This provision previously stated that failing to pay on GDP-linked warrants could lead to a default on other obligations, including international bonds.
With this clause removed, Ukraine is not obligated to declare a default on its international bonds, the ministry stressed.
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