Ukraine’s Naftogaz fails to pay $1.67 bln govt-guaranteed bond; no default yet | Reuters
▻http://www.reuters.com/article/2014/10/01/ukraine-crisis-bonds-naftogaz-idUSL6N0RW1K320141001
Ukraine’s state energy company, Naftogaz, has failed to pay a maturing $1.6 billion debt, raising risks of a default on the country’s sovereign Eurobonds and sending debt insurance costs to seven-month highs.
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The Eurobond, which amounts to $1.67 billion once interest is included, is fully guaranteed by the Ukrainian government. So if it is not paid within the grace period, it will trigger so-called cross-default clauses, bringing due all of Ukraine’s sovereign bonds at once.
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But market players were critical of the government, which has repeatedly assured investors it would honour the issue on time.
“They had plenty of time to organise themselves to make this payment. This looks very last minute now,” Standard Bank analyst Tim Ash said. “Investors ... don’t appreciate the white-knuckle ride.”
