Ukraine Creditors Could See 50% Loss in a Default, Goldman Says - Bloomberg

Ukraine Creditors Could See 50% Loss in a Default, Goldman Says - Bloomberg:



"Ukraine’s deteriorating economic outlook is increasing the likelihood of a default that could saddle bondholders with losses of about 50 percent, according to Goldman Sachs Group Inc.



A six-month conflict with pro-Russian rebels has spurred capital outflows and disrupted economic output to the point where it brings into question Ukraine’s ability to continue paying its debt, Goldman analysts including Clemens Grafe wrote in an e-mailed report. Past restructurings indicate bondholders could lose half their principal, according to the note.



A Sept. 5 truce is holding amid efforts to end a war the United Nations estimates has claimed at least 3,000 lives. The fighting in Ukraine’s Donetsk and Lugansk regions has destroyed productive capacity, displaced a large share of the country’s population and disrupted exports, prompting Goldman to raise economic contraction estimates to 8 percent from 3 percent in March and increase this year’s debt-to-GDP forecast to 70 percent from 55 percent."



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