Government trying to save Kyiv from default

Wednesday, October 8, 2014 - 14:25 (EEST) Section: Latest news

The Ukrainian government has allocated UAH 1.8 billion to Kyiv, including for gas debt repayment.
Ukrainian Prime Minister Arseniy Yatseniuk said this at a cabinet meeting on Wednesday, Ukrinform’s correspondent reported.
“We have allocated UAH 1.8 billion in support of the capital. I am asking the finance minister to allocate [UAH] 835 million to ensure the repayment of Kyiv’s debt for the consumption of natural gas,” he said.
Yatseniuk said that UAH 1 billion of this amount was direct assistance to the city to complete debt repayment.
“If there are debts, it is clear that warm water is not supplied in some districts. Accordingly, the government assumed the repayment of part of the debt,” he said.
As reported, Fitch Ratings downgraded Kyiv’s long-term foreign and local currency Issuer Default Ratings (IDRs) to ‘CC’ from ‘CCC.’ The downgrade follows the city’s missed payment on October 6, 2014 of a scheduled repayment of UAH 1.125 billion. If Kyiv does not cure the overdue payment on October 9, 2014, Fitch will consider the extension of the bond repayment as a distressed debt exchange (DDE). A DDE will be viewed a ‘Restricted Default’ and the agency will downgrade Kyiv’s national long-term rating and local currency long-term IDR to ‘RD’ (Restricted Default) and the bond ratings of the affected security to ‘D’ (Default).