Kiev--Ukraine's biggest private creditors mounted a firm defence Wednesday of their refusal to accept a debt write-off that could keep the impoverished but strategic ex-Soviet nation from slipping into default.
The group of four US investment giants -- who own nearly two-thirds of the $15.3 billion (16.3 billion euros) Ukraine is seeking in debt forgiveness -- denied being too firm with a Western ally reeling from a war with pro-Russian militias across its eastern industrial heartland.
Kiev argues that investors placed their bets in Ukraine's Eurobonds when the government was aligned with Russia and must now bear the partial cost of a 2014 popular revolt against a corrupt Kremlin-backed ruler.
Ukraine's debt restructuring offer would both delay and reduce upcoming interest payments. Kiev also wants to slash the value of the original bonds -- a package of measures that could see creditors get back only 40 cents on the dollar.
The proposed "haircut" on the principal has particularly upset the ad-hoc bondholders' committee.
"A haircut sends the wrong signal to global capital markets when Ukraine can least afford to be shunned," they wrote in a letter published in the Financial Times.
"Ukraine and its business community need access to finance to help spur recovery. That could be put at risk."
The group made no mention of their previous demand for Kiev to dip into its depleted central bank reserves to cover the upcoming payments.
That plan was heavily criticised by International Monetary Fund chief Christine Lagarde on Friday and now appears to be off the table.
AFP
