Yatsenyuk Takes Credit for 20% Write down, as credit drops

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September 1st, 2015

PolitNavigator – translated for Fort Russ by Soviet Bear

The West has agreed to write off 20% of Ukraine’s debt and postponed the payment of previous loans for 4 years. This was stated by Prime Minister of Ukraine Arseniy Yatsenyuk at the Cabinet meeting.

“The default expected by our enemies will not happen. Ukraine reached an agreement on the restructuring and partial write-off of our debt,” he said.

“We managed to get the following conditions: 20% of the debt of the country is written off. A speech that is written down nearly 4 billion US dollars. Secondly, the cost of servicing our loans is not increased. Third: in the next 4 years Ukraine will not redeem the principal. And our obligations that we had to pay from 2015, transferred to 4 years” — listed Yatsenyuk.

“Ukraine is in unique conditions in which no other country was since 2000. The average amount of the write off without the announcement of a default was not more than 10%. Ukraine has written-off 20%,” — said the official.

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According to him, Russia has not joined the countries that agreed to postpone the payment of debts. However, Kiev does not intend to pay the debt to Moscow (they yet to find $ 3 billion until the end of the year) and also anticipates a debt write-off from Russia.

“The Russian Federation has not joined the creditors’ committee. The government of Ukraine officially declares that Russia will not receive better terms than other lenders under any circumstances. It’s their decision. Or accept our terms, or you will never get better terms,” Yatsenyuk warned.

Finance Minister Natalia Yaresko said that after the decision of the Western creditors the total debt of Ukraine has decreased from 19.3 to 15.5 billion at an average rate of 7.75% 

Yaresko expressed hope that all debts will be repaid soon, and “after 2020 Ukraine’s economy will grow faster than the IMF predicts”.

The news of the debt write-off by the West were presented as a great “peremoga” (victory) by senior government officials. At the Cabinet meeting Interior Minister Arsen Avakov handed presents to Yatsenyuk and Jaresko – bouquets of flowers in vases made from shell casings in the area of so-called ATO.

After the scheduled show ended, the press was asked to leave the room.

[Note: recall that this 20% haircut is not being taken well by lending institutions, with Fitch seeing this as a sign of imminent default.  As a result of this haircut, Ukraine’s rating has dropped from CC to C] 

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