Wednesday 9 October 2013

UPDATE 2-Ukraine's Naftogaz pays blocked bond coupon, averts damaging default | Reuters

UPDATE 2-Ukraine's Naftogaz pays blocked bond coupon, averts damaging default | Reuters:

"* $21.7 mln frozen by London court in suit by unnamed party

* Non-payment could have resulted in debt default

* Naftogaz panic hits Ukraine amid trade threats from Russia

By Natalia Zinets

KIEV, Oct 9 (Reuters) - Ukraine's state oil firm Naftogaz has paid a delayed $21.7 million coupon to bondholders after its first payment was frozen by a London court, the finance ministry said on Wednesday, narrowly averting a damaging debt default.

The company, whose bond was fully guaranteed by the Ukrainian government as part of an older 2009 debt restructuring, had until Oct. 10 to make the payment originally due on Sept. 30 as part of a $75.8 million bond coupon.

Failure to pay within the 10-day grace period could have triggered so-called cross default, not only on Naftogaz's entire outstanding debt but eventually on billions of dollars of Ukrainian sovereign bonds, in what would have been a major blow for a country that is already facing deep financial stress."

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