Archive for the ‘Ukraine’ Category

Ukraine not out of the woods yet

That leaves the $17 billion of Eurobonds as the most likely candidate for a debt restructuring, of which U.S. fund manager Franklin Templeton owns $8 billion and the Russia government owns $3 billion, Capital Economics said, citing media reports.

Russia, which is seen as backing the rebels in the east, will not be in a position to obstruct proceedings, analysts say. It owns less than 20 percent of the principal and will not be able to veto any future agreements which require a two-third majority.

Franklin Templeton did not respond to emails from CNBC requesting comment.

Looming deadlines

Some sort of resolution will need to be reached in the coming months because around $4 billion of the Eurobonds are due in the fourth quarter of 2015.

Investors for their part appear to be preparing for a default: the spread on Ukraine's five-year sovereign credit default swaps were trading between 3,462 and 3,771 basis points, according to Markit data. They have widened by 68.3 percent over the past month.

Beyond meeting upcoming redemptions, Ukraine faces the challenge of stabilizing its economy, while financing military operations in the East.

"The main effort for the government, at least in the near- to medium-term, is to prioritize achieving macroeconomic stability while financing military operations in the country's east," said Stratfor Global Intelligence.

Limited impact

The consequences of a default may be limited outside of Ukraine because the size of the country's debt is quite small, however.

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Ukraine not out of the woods yet

Ukraine not out of the woods

That leaves the $17 billion of Eurobonds as the most likely candidate for a debt restructuring, of which U.S. fund manager Franklin Templeton owns $8 billion and the Russia government owns $3 billion, Capital Economics said, citing media reports.

Russia, which is seen as backing the rebels in the east, will not be in a position to obstruct proceedings, analysts say. It owns less than 20 percent of the principal and will not be able to veto any future agreements which require a two-third majority.

Franklin Templeton did not respond to emails from CNBC requesting comment.

Looming deadlines

Some sort of resolution will need to be reached in the coming months because around $4 billion of the Eurobonds are due in the fourth quarter of 2015.

Investors for their part appear to be preparing for a default: the spread on Ukraine's five-year sovereign credit default swaps were trading between 3,462 and 3,771 basis points, according to Markit data. They have widened by 68.3 percent over the past month.

Beyond meeting upcoming redemptions, Ukraine faces the challenge of stabilizing its economy, while financing military operations in the East.

"The main effort for the government, at least in the near- to medium-term, is to prioritize achieving macroeconomic stability while financing military operations in the country's east," said Stratfor Global Intelligence.

Limited impact

The consequences of a default may be limited outside of Ukraine because the size of the country's debt is quite small, however.

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Ukraine not out of the woods

Ukraine Crisis: President Poroshenko Confirms Rebels Withdrawal – Video


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Ukraine Today Press Review: Russian troops presence in east Ukraine – Video


Ukraine Today Press Review: Russian troops presence in east Ukraine
Despite irrefutable evidence of Russia #39;s invasion of Ukraine, it appears that the views of West leaders about the war have so far been slow to change. Sanctions against the Kremlin, meanwhile,...

By: UKRAINE TODAY

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Ukraine Today Press Review: Russian troops presence in east Ukraine - Video