REUTERS
Pay day approaches for investors who had bought protection against a government debt default by Ukraine, according to The Financial Times.
The International Swaps and Derivatives Association (ISDA) said on Monday that Ukraine's deal with bondholders to restructure $18 billion of debt constituted a credit event, The Financial Times reports.
As such, holders of insurance on the country's sovereign debt (via so-called credit default swaps) can seek payment.
The ISDA's determinations committee said an auction to determine the payout that CDS holders would receive will take place on October 6.
Read alsoISDA assesses Ukraine credit event as $500 million bond matures: BloombergLast year, Argentina's default triggered a payout of EUR 2.5 billion to investors who had purchased the insurance-like contracts against the event.
Ukraine recently agreed a restructuring deal with a group of international creditors holding around $9 billion of the country's outstanding debt and this week the country's parliament backed the plan, which requires investors to accept a 20% haircut on the face value of their bonds and pushing back debt repayment dates.
Read alsoRada green-lights sovereign debt restructuringIn August, credit rating agency S&P said that the exchange, which is part of a $40 billion IMF rescue plan for the country, would classify as a default.