Ukraine creditors await election result

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A complex restructuring of Ukraine debt this summer, by which the country narrowly managed to averted default, was covered by Euromoney in its August edition. Already, that deal is beginning to look like a postponement rather than a resolution of Ukraine's financial problems. It is hard to see how the country will make the $2.9 billion bond payments that will come due next year - especially after elections that may bring about a radically new government.

On the optimistic side, the debt restructuring process has smoothed out Ukraine's repayment schedule. Before restructuring, repayments due in 2000 amounted to roughly $3.2 billion. Further, much of this amount owed is in soft debt - that is, loans to other CIS countries. Privatization, an area where Ukraine so far lags far behind Russia, may also bring in a few dollars. "There are still a number of major state assets that they could sell to raise cash. And most are betting on that the flow of funds into the country from foreign direct investment will restart after the elections," explains Tomas Fiala, President of Wood & Company, one of the largest brokerages in Ukraine.


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