Photo: Voice of Russia

Russia does not rule out a minor risk of loan default for $3 billion invested in Ukrainian Eurobonds in December last year, Deputy Finance Minister Sergei Storchak told the reporters. Nobody expected the situation to change so drastically. In my practice, there was no such case of the holder of issuers sovereign bonds being another sovereign. Therefore, I cannot recall such liabilities to be unfulfilled, restructurized or even partially annulled. In this case we probably have the risks, but they are of a completely different kind and not as big, Storchak said.

The situation with the Ukrainian debt is unlikely to develop in accordance with the last year Greek scenario. PSI (Private Sector Involvement) is not possible here, not like with Greece, where holders of Greek bonds were simply forced to join the massive write-downs of assets. This is not the case, I believe, Storchak added.

Surely, we can assume that the debtor will find himself in a difficult financial situation, that he will not be able to return the money invested in his tools in two years time, as we agreed, Storchak said, speaking about the $12 billion bailout out of $15 billion, on which an agreement was reached in December.

There are no legal obligations, we will speak about a new round of negotiations and new arrangements. In what form they will be drawn — time will tell, Deputy Minister said. He added that, given the events in Ukraine, the probability of the issuers default on the bonds is considered high.

Ukraine not to issue additional two-year Eurobonds

Ukraine has notified the Irish Stock Exchange that it will not be issuing additional two-year Eurobonds maturing in 2015 and amounting to $1.985 billion, the exchange said.

The issuer has notified the exchange of the decision. The ISE on February 19 canceled its decision of February 17 to list $1.985 billion in additional Ukrainian Eurobonds maturing in 2015 because the bonds have not yet been issued.

As the securities have not yet been issued, listing and admission to trading was made in error on February 17, 2014 and will occur upon the issuance of the securities, the ISE said in a statement.

Russia’s second aid tranche to Kiev depends on Ukrainian gov’t Duma deputy

The next $2-billion tranche of Russia’s $15-billion loan to Ukraine will depend on the Ukrainian government, Alexei Pushkov, Chairman of the Russian State Duma International Affairs Committee, said, the Voice of Russia correspondent Ksenya Melnikova reports.

Russia has stated that we will honor our agreement, but we need to understand what will happen to the Ukrainian government and to whom we should give the money. So far, the situation is unclear. I do not rule out that the further financing of Ukraine will depend on whether it has a stable and efficient government, Pushkov said.

At present, Ukraine has no prime minister, which undermines the very concept of a stable and efficient government, he remarked.

But we aren’t backing down. President Putin made it precisely clear that we will stick to our commitments provided the Ukrainian side does the same, Pushkov said.

In December, Russia agreed to lower the gas price for Ukraine by one-third to $268.5 per 1,000 cubic meters and to buy $15-billion worth of Ukraines Eurobonds. The same month, Ukraine received $3 billion from Russia in exchange for Eurobonds. On January 29, Ukraines Acting Prime Minister Sergei Arbuzov said that Ukraine was hoping to get the second aid tranche worth $2 billion. Later, Russian President Vladimir Putin and Prime Minister Dmitry Medvedev said that it was necessary to wait until a new Ukrainian Cabinet was formed.

Voice of Russia, Prime, Interfax