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Russia Hints It May Force Ukraine Into Default, “May Ask Ukraine For Its $20 Billion Share For Ex-Soviet Debt” | Zero Hedge

Russia Hints It May Force Ukraine Into Default, “May Ask Ukraine For Its $20 Billion Share For Ex-Soviet Debt” | Zero Hedge.

Rook to G8, check.

  • RUSSIA MAY ASK UKRAINE TO PAY ITS $20B SHARE FOR EX-SOVIET DEBT

Pidgeon playing checkers response time.

This should come as no surprise as we warned of at least $3b in bonds that are due very soon

the Ukraine owes $3 billion to Russia in bonds that have been issued under UK law. One of the stipulations of the bonds is that if the Ukraine’s debt-to-GDP ratio should exceed 60%, the bonds will become immediately callable.

Once the Ukraine gets funding from the IMF,  this is of course going to happen right away – its debt-to-GDP ratio will then most definitely exceed 60%, so the first $3 billion of any aid the Ukraine receives in the form of loans will right away flow into Russia’s coffers.

Of course there may be litigation first, but as Greek bondholders have found out, all those who held bonds issued under UK law were actually paid in full, while everybody else had to accept the ‘PSI’ and could basically go pound sand.

Russia Hints It May Force Ukraine Into Default, "May Ask Ukraine For Its $20 Billion Share For Ex-Soviet Debt" | Zero Hedge

Russia Hints It May Force Ukraine Into Default, “May Ask Ukraine For Its $20 Billion Share For Ex-Soviet Debt” | Zero Hedge.

Rook to G8, check.

  • RUSSIA MAY ASK UKRAINE TO PAY ITS $20B SHARE FOR EX-SOVIET DEBT

Pidgeon playing checkers response time.

This should come as no surprise as we warned of at least $3b in bonds that are due very soon

the Ukraine owes $3 billion to Russia in bonds that have been issued under UK law. One of the stipulations of the bonds is that if the Ukraine’s debt-to-GDP ratio should exceed 60%, the bonds will become immediately callable.

Once the Ukraine gets funding from the IMF,  this is of course going to happen right away – its debt-to-GDP ratio will then most definitely exceed 60%, so the first $3 billion of any aid the Ukraine receives in the form of loans will right away flow into Russia’s coffers.

Of course there may be litigation first, but as Greek bondholders have found out, all those who held bonds issued under UK law were actually paid in full, while everybody else had to accept the ‘PSI’ and could basically go pound sand.

Ukraine Currency Crashes To Record Low | Zero Hedge

Ukraine Currency Crashes To Record Low | Zero Hedge.

Russia’s earlier “default” warning (or threat) has not just impacted Ukrainian bonds but the currency is crashing. The Hyrvnia is down a stunning 6.8% today – the biggest drop since Feb 2009 – to a record low 9.8 to the US Dollar. This crisis is far from over and we would expect capital controls in 3…2…1…

 

Ukraine Bonds Re-Collapse As Russia Warns Of “High Chance Of Default” | Zero Hedge

Ukraine Bonds Re-Collapse As Russia Warns Of “High Chance Of Default” | Zero Hedge.

Russian bonds had rallied for 2 days on the heels of the ouster of Yanukovych and a hope-fueled strategy (supported by Goldman’s buy-buy-buy recommendation) that Europe or the IMF would save the day and fund them back to solvency. However, Russian deputy finance minister Storchak has a different perspective…

  • *UKRAINE FACES HIGH PROBABILITY OF DEFAULT: RUSSIA’S STORCHAK
  • *RUSSIA AGAINST INCLUDING $3B UKRAINE DEBT IN ANY RESTRUCTURING
  • *RUSSIA: NO LEGAL OBLIGATION TO GIVE UKRAINE REMAINING BAILOUT

And that has sent 3-month Ukraine bond prices tumbling once again…

 

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