UK urged to protect Ukraine from legal action over private debt default

The Guardian

Kyiv shouldn’t have to fight ‘shameless bondholders’ as repayment deadline nears, say campaigners

Campaigners are urging Britain’s new Labour government to prevent Ukraine being sued in the UK courts if the country defaults on its debts to private creditors.

Debt Justice said a two-year suspension of Ukraine’s debt payments was scheduled to expire on 1 August, and that action was needed to protect Kyiv from the possibility of legal action from its creditors.

Ukraine is in negotiations with bondholders and is seeking a debt writedown of 60% on the $24bn (£18.7bn) it owes to private creditors. Bondholders – which include big investment groups such as BlackRock, Pimco, Fidelity and AllianceBernstein – have said they are willing to take a 20% loss.

Ukraine’s official bilateral creditors, including the UK, have agreed to continue suspending Kyiv’s debt payments until 2027, but there has been no agreement to extend the arrangement with private creditors. The relief offered by private creditors is worth around 12% of Ukraine’s annual national output (GDP).