Economics
Worse to Come on Ukraine Debt as Moratorium Threat Raises Stakes
Ukraine’s bonds slumped 1.3 cents on Tuesday as the country raised pressure on creditors by passing a parliamentary bill giving it the power to impose a moratorium on international bondholders.
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Ukraine’s bonds may have a long way to fall even after the announcement of a possible moratorium on interest payments triggered the deepest selloff in two months.
The debt slumped to 45 cents on the dollar on Tuesday. Prices could drop to below 40 cents if negotiations on restructuring the $23 billion of bonds drag on, according to Vadim Khramov, an economist at Bank of America Merrill Lynch, who downgraded Ukraine’s debt to underweight hours before Tuesday’s slump.