IMF’s next tranche to Ukraine to depend on bond owned by Russia

WASHNIGTON, Dec 15 (PRIME) -- The International Monetary Fund (IMF) has called on Russia and Ukraine to settle Kiev’s U.S. $3 billion Eurobond owned by Moscow on which the fund’s disbursal of the next tranche depends, Ron van Rooden, chief of the IMF’s recent mission to Ukraine, told reporters late on Wednesday.

He declined to say whether any progress had been reached on the matter, but added that the disbursement of the next tranche is technically impossible until the end of 2016.

The IMF four-year program for Ukraine envisages provision of $17.5 billion to the country. Kiev received the first $5 billion tranche in March 2017 and the second, $1.7 billion tranche in August 2015. The third, $1 billion tranche was disbursed in September.

Russia bought the 2-year Eurobonds in December 2013 and rejected restructuring conditions offered by the country to its commercial creditors. Kiev insisted that the terms of debt repayment to Russia should be the same as for private creditors. The International Monetary Fund (IMF) recognized the debt as sovereign.

In February, Russia filed a lawsuit with the High Court of London demanding that Ukraine pay the main debt of $3 billion, as well as $75 million represented by the last coupon and an additional interest accrued since maturity on December 20, 2015.

On December 2, Russian Finance Minister Anton Siluanov said Moscow is still ready for any constructive dialogue with Kiev on the matter, but no initiative had come from Ukraine as its proposal to restructure the debt at conditions of a commercial loan was still unacceptable.

End