Ukraine won't be able to redeem 'Russian' Eurobonds on initial terms – Ukrainian MinFin

Ukraine will not be able to redeem the $3 billion in "Russian" eurobonds, which mature on December 20, 2015, on initial terms, the Ukrainian Finance Ministry said.

"Regardless of their characterization, and reserving Ukraine's position as to the obligations themselves, the December 2015 eurobonds constitute debt obligations which Ukraine cannot pay in accordance with their initial terms without (i) violating the financing targets established under the Extended Fund Facility and (ii) breaching its contractual obligations under the 'most favored creditor clause' included in the new sovereign debt securities issued in November 2015 as part of the recently completed debt operation," the ministry said in a statement, posted on its website.

"The Ukrainian government takes note of the IMF Executive Board's view that the so-called 'Russian bond' is an official claim for the purposes of the Fund's policy on arrears to official bilateral creditors."

"Therefore, the Ukrainian Government expects that the IMF's new Lending into Official Arrears policy will allow the IMF to continue financing Ukraine under the Extended Fund Facility, notwithstanding Ukraine's position on the December 2015 eurobonds and any suspension of payment thereunder," the ministry said.