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The Cabinet of Ministers of Ukraine proposes that the Verkhovna Rada cancel the end date of the moratorium on debt repayment, which has been determined by the current legislation, as stated in a bill on amendments to article 4 of Law of Ukraine "On certain aspects of transactions with state debt, state guaranteed debt and local debt."
In accordance with the existing legislation, the moratorium on debt payments expires on July 1, 2016.
The abolition of the regulation on the end date for debt moratorium is primarily aimed at completing the debt operation under a $3 billion "Russian" bond maturing in 2015. The Russian debt has been recognized as official debt of the Ukrainian government and is subject to restructuring. The reluctance of the Russian authorities to negotiate the debt restructuring has prompted the Ukrainian government to impose a moratorium on debt payments to the tune of $3 billion, as well as debts of a number of Ukrainian companies owed to Russian banks totaling $507 million.
As stated in the explanatory note to the bill, the adoption of the document will enable the government to fulfill all its commitments under the reform program agreed with the International Monetary Fund (IMF), Ukraine’s key creditor.
Read alsoUkraine imposes moratorium on Dec 2015 Russian eurobond: Yatsenyuk"The abolition of restrictions on the end date will prolong the validity of the legal basis for searching further ways to restructure the external debt," according to the statement.
It is also noted that the debt moratorium can be abolished as soon as the agreement is reached regarding December 2015 Russian eurobond.
Read alsoRussia awaits repayment of $3 bln by Ukraine until year endAs UNIAN reported earlier, Ukraine and the ad hoc creditors' committee on August 27 agreed on restructuring part of sovereign debt to the tune of $18 billion. The restructuring involves a complete write-off of $3.8 billion, a four-year deferral of principal debt repayment, as well as the establishment of a single 7.75% interest rate for the bonds.
On November 12, Ukraine successfully completed the settlement of Ukraine's debt restructuring operation in respect of 13 series of sovereign and sovereign-guaranteed eurobonds. The so-called "Russian" bonds issued in December 2013 maturing in 2015, were not included in the restructuring list.
On December 16, the IMF Executive Board decided that the claim arising from the $3 billion eurobond issued by Ukraine on December 24, 2013 and held by Russia's National Wealth Fund is an official claim.
The Ukrainian Finance Ministry issued a statement claiming that Ukraine was not able to repay a $3 billion debt owed to the Russian Federation in accordance with its initial terms without violating the financing targets established under the IMF Extended Fund Facility. At this, the ministry underlined that the terms of the new Ukrainian sovereign bonds issued on November 12, 2015 specifically provide that a payment default or other event of default under the December 2015 eurobonds would not constitute a cross-default under the new bonds.
On December 18, Ukraine announced the moratorium on any payments of the Russian debt.