Moratorium on payment of the sovereign debt extended

On 12 April 2016 Parliament adopted "Amendments to the Law of Ukraine On Specifics of Transactions with Sovereign Debt, Sovereign Guaranteed Debt and Local Debt", pursuant to which the moratorium on payment of the sovereign debt of Ukraine was extended for an indefinite period of time.

The moratorium was initially introduced on 19 May 2015, and was expected to remain valid until 1 July 2016. It applied to the vast majority of sovereign bonds issued and loans received by Ukraine, and was introduced as a measure to facilitate the overall sovereign debt restructuring.

Given that most of the sovereign debt has already been restructured, the extended moratorium appears to principally apply only to the USD 3 billion of Ukrainian sovereign bonds held by Russia. These bonds allegedly became due in December 2015, and are the primary part of Ukraine’s sovereign debt which has not been restructured.

The moratorium may be lifted if the creditor signs an agreement with the Government of Ukraine on the restructuring of the relevant debt, or if terminated by a separate law.

The Law is yet to be signed by the President of Ukraine, but this is anticipated, and, once signed, will become effective on the day immediately following its publication in the official media.

If you would like to receive further information in connection with the above, please contact Olexiy Soshenko.