Ukraine: A Bailout or “Bail In” for Bond Investors? | AllianceBernstein Blog:
"As the drama of the political showdown over embattled Ukraine plays out, bond investors face less-publicized concerns over the fate of their Ukrainian investments and a potential bailout. But a bailout may not be all good news for investors.
Bond investors hope that massive international aid will enable Ukraine to make its debt-service payments. But a little-noticed April 2013 paper by the International Monetary Fund (IMF) calls into question that entity’s willingness to bankroll sovereign-bond payments to private lenders. How Ukraine’s issues—and those of its creditors—are handled will set a precedent. And we think investors may need to reassess their assumptions about how quickly they can expect a sovereign-debt restructuring."
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