Russia launches proceedings over Kiev’s $3 bln Eurobond default

MOSCOW, Jan 11 (PRIME) -- Russia’s Finance Ministry has initiated legal proceedings over Ukraine’s default on its U.S. $3 billion Eurobond debt, the ministry said in a statement on January 1.

“The Finance Ministry says that Ukraine has failed to pay a total of $3.075 billion in repayment and servicing of foreign debt owned by Russia during a grace period that expired on December 31, 2015. So, Ukraine is now in a default on these bonds,” the ministry said.

Russia bought the 2-year Eurobonds in December 2013 and rejected restructuring conditions offered by Ukraine to its commercial creditors. Kiev insisted that the terms of debt repayment to Russia are the same as for private creditors. The International Monetary Fund (IMF) recently recognized this debt as sovereign. On December 29, Kiev imposed a moratorium on redemption of the debt until Moscow accepts previous restructuring conditions.

“In light of the above, the Finance Ministry of Russia has submitted a request to the Law Debenture Corporation plc company, which acts as the creditor’s grantor in accordance with the issue’s documentation, and initiated procedures necessary for an immediate legal trial with Ukraine. A corresponding suit will be filed to a court of England,” the ministry said.

Russia is still ready to study any viable debt restructuring proposals from Ukraine and is ready to hold talks on the matter, the ministry said.

The Ukrainian Finance Ministry said in a statement on January 5 that it is ready to defend its position in court.

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