Ukraine

The Russian Ministry of Finance is living in a fantasy land if it thinks the IMF will have to reconsider its support of Ukraine under the Extended Fund Facility Agreement, according to analysts.

The Russian Ministry of Finance is living in a fantasy land if it thinks the IMF will have to reconsider its support of Ukraine under the Extended Fund Facility Agreement, according to analysts.

Metinvest’s restructuring saga looks set to continue well into 2016 after the Ukrainian lender asked investors for a waiver of default up to May 27, 2016.

Russia's Ministry of Finance has initiated legal action against Ukraine over the latter’s failure to repay a $3bn December 2015 Eurobond. It also claims that the default breaches the terms of the International Monetary Fund’s Extended Fund Facility.

Ukraine announced a moratorium on the $3bn bond held by Russia’s National Welfare Fund on Friday. The moratorium also covers Ukraine’s sovereign-guaranteed loans for Ukravtodor and Yuzhnoye.

Bondholders have approved the restructuring proposal for the City of Kiev 2016s and extended the deadline for approval of restructuring of its 2015 Eurobonds.

Holders of City of Kiev’s Eurobonds could reject restructuring proposals at a meeting in London on December 8, according to analysts in Ukraine.

Ukraine’s Privatbank has received approval from the High Court of England and Wales for a restructuring deal approved by holders of its subordinated Eurobonds.

Ukraine this week received the necessary votes to restructure 13 of the 14 Eurobonds it targeted, with the leaving just the problem of a Russian-held $3bn bond to be solved. But even with an end to the restructuring odyssey in sight, CEEMEA watchers are worried about the economic outlook and the nature of the restructuring agreement.

The Russia and Ukraine finance ministers discussed the latter’s Eurobond restructuring agreement at the IMF meetings in Peru. But neither seems willing to ask the IMF to rule on the status of a $3bn Ukrainian Eurobond sold to Russia, said analysts.

Banks on Tuesday settled credit default swaps referencing the Republic of Ukraine at 80.625, the highest recovery on a sovereign credit event auction since they began in 2005.

Eastern Europe is generally viewed by credit investors as one of the safer segments of the increasingly shaky emerging markets asset class. But the aggressive presence of Russia poses risks, as its neighbours know all too well.