Russia says it has received an official refusal from the U.S. government to provide guarantees for Ukraine’s debts and that Moscow will sue Kiev if it doesn’t pay its debt on time.
The Russian Finance Ministry says that without Washington’s guarantee for Ukraine’s debt, Moscow cannot restructure the $3 billion loan and will sue Kiev if it doesn’t repay the debt by December 20, when it is due.
Russia had offered to restructure Ukraine’s Eurobond loan in equal installments over the next three years if the West agreed to provide guarantees.
But Ukraine has included the Russian loan among several loans that are to be restructured in a deal with a group of its largest creditors, in effect spurning Russia’s restructuring offer.
The Russian Finance Ministry claimed that its restructuring offer had better terms for Ukraine than the International Monetary fund (IMF) loan terms.
Ukraine is restructuring its debts under an IMF-led $40 billion bailout program.
The Eurobond was issued by the government of former President Viktor Yanukovych in 2013.