Russian PM wants debt issue with Ukraine resolved in three weeks

A solution on Ukraine’s USD 3 bln debt should be found in the nearest three weeks, Russian PM Dmitry Medvedev told a Nov. 19 press briefing, as reported by Interfax. He was referring to the Ukrainian Eurobonds, held by a Russian state fund, that will mature on Dec. 20. In the coming three weeks “some rules will be changed by the IMF, which is also involved in this issue,” he said. Russia has offered Ukraine “very favorable conditions” on restructuring this debt, he said, or USD 1 bln in each of the next three years.

Medvedev added that, “as far as he understood,” the Russian and Ukrainian finance ministers have discussed the issue. However, this information was not confirmed by the Ukrainian side. Ukraine’s Finance Ministry has not received any offer from the Russian side, a MinFin spokesperson told Concorde Capital today. “The ministry is open to dialogue,” she said.

Medvedev named two conditions for the deal in his remarks. “First, one should stop bullheadedly clinging to the non-recognition of the sovereign profile of this debt”, he said, likely referring to Ukraine’s position that this debt is private, as well as to the IMF’s silence regarding the status of this debt. “It’s clear to all honest people” that this debt was inter-government, he said. (On the contrary, a day earlier Fitch Ratings said that non-payment of the USD 3 bln debt “would not constitute a default under Fitch's sovereign ratings criteria.”) Secondly, Medvedev wants to see a guarantee on the debt either from the U.S., or from the EU, or from separate EU countries, or from a first-tier European or international bank.

Alexander Paraschiy: Clearly, international rating agencies support the Ukrainian interpretation of this debt as private and Medvedev’s remarks, not matter how nasty, won’t affect them. We also expect the IMF board will not be impressed by Russian arguments regarding the status of the USD 3 bln debt. We do not believe it’s possible for all the involved parties to resolve this debt issue within three weeks, as suggested by Medvedev. That’s mainly because of Russia’s position, which is not even hurrying to approach the Ukrainian side to start negotiations. We believe the Russian offer is not acceptable for Ukraine and its international creditors, thus we continue to expect that Ukraine won’t pay by Dec. 20 and the “dialogue” will continue in the international courts.

Источник: Конкорд Капитал