IMF Executive Board decides on status of Ukraine's eurobond held by Russia

In the case of the eurobond, the Russian authorities have represented that this claim is official. The information available regarding the history of the claim supports this representation, the statement reads.

The bond was acquired by Russia's NWF pursuant to a decision by the Russian Government to provide assistance to Ukraine, as noted in the press release.

The NWF, in acquiring the eurobond, was acting on behalf of the government.

"Subsequently the Russian authorities confirmed to Euroclear, at the request of the Ukrainian authorities, that the eurobond has at all times been 100% owned by the Russian Government," the IMF Executive Board stated.

"Based on the foregoing considerations, staff is of the view that the eurobond is an official claim for the purposes of the Fund's policy on arrears to official bilateral creditors. In particular, the eurobond (i) is held by the NWF, an agency acting on behalf of the Russian Government; and (ii) originates from a transaction where the NWF acted on behalf of the Russian Government to provide financing to Ukraine," according to the press release.

As UNIAN reported earlier, on August 27, Ukraine and the creditors' ad hoc committee reached an agreement on the restructuring of public debt, totaling $18 billion. The restructuring involves a complete write-off of $3 billion, deferral of payments under the principal debt for four years, as well as the establishment of a single 7.75% interest rate for the bonds.

Ukraine's restructuring perimeter includes a loan which was given to Ukraine under agreements between Russian President Vladimir Putin and the then Ukrainian President Viktor Yanukovych. The loan was granted on December 2013 in exchange for a $3 billion eurobond. The fact that the bonds were purchased via the Irish stock exchange makes the disbursement a private creditor debt. However, the Russian side insists that this is an interstate debt, as the buyer was the state-owned National Wealth Fund. Ukraine added the $3 billion eurobond to the sovereign and sovereign-guaranteed bonds to be restructured, but Russia reiterated it did not see the debt as commercial.

Later, on October 14, a meeting was held in London, during which more than 75% of the holders of Ukraine's eurobonds to be restructured agreed to the general terms of the restructuring of Ukraine's debt.

Russia refused to participate in Ukraine's debt restructuring deal, nor did it put forward its proposals to resolve the debt issue.

At the same time, the IMF has called on Russia and Ukraine to come to the table on a $3 billion eurobond. On December 8, the Fund changed its lending rules to allow it to keep supporting countries if they fail to repay official creditors, a move that would also help Ukraine if it missed payments on a $3 billion debt to Russia.

Head of the Ukrainian government Arseniy Yatsenyuk stressed Ukraine was ready to begin legal proceedings with Moscow regarding the repayment of debt.