MOSCOW Russia has received an official refusal from the U.S. government to give guarantees for Ukraine’s liabilities, Russian news agencies reported on Saturday, citing Russia’s Finance Ministry.
Russia and Ukraine are at loggerheads over a $ 3 billion Ukrainian Eurobond held by Russia and maturing on Dec. 20.
Russia has presented to restructure the debt in equal installments over the next 3 years if the West supplies guarantees. But Ukraine has included it amongst the sovereign and sovereign-guaranteed bonds to be restructured in a deal with a group of its largest creditors.
“This week we received an official refusal from the U.S. government to give guarantees on Ukraine’s liabilities. In this regard, there is practically nothing left but for us to file a legal case against Ukraine if the debtor does not fulfill its liabilities totally on Dec. 20,” RIA news agency cited the Finance Ministry as saying in a statement.
The ministry added that Russia had offered Ukraine better terms than these the International Monetary Fund had asked for.
Ukraine is restructuring its debts in order to plug a $ 15 billion funding gap below an IMF-led $ 40 billion bailout system.
The Eurobond is particularly contentious as it was issued by the government of former president Viktor Yanukovich in late 2013 as public protests took off against his swing away from association with the European Union towards deeper ties with Russia.
Unrest and bloodshed ultimately forced Yanukovich to flee.
(Reporting by Alexander Winning Editing by Toby Chopra)