IMF treats USD 3 bln Russian loan as bilateral debt, spokesman says

During a March 26 press-briefing at the IMF William Murray, Deputy Spokesperson of the Fund claimed that the USD 3 bln Ukraine owes to Russia is considered a bilateral creditor debt (not a private debt).  “If I’m not mistaken, the USD 3 bln Eurobond comes from the Russian Sovereign Wealth Fund” said the IMF official.

Previously, the official claimed that the Fund does maintain a policy of non-toleration of arrears to official bilateral creditors, which means that the IMF does not cooperate with countries which are in default on its debts.  “This policy requires the elimination of existing arrears and the non-accumulation of new arrears during the program period with respect to official creditors” said William Murray.  Remarkably, Russia has indicated that it is not prepared at this point to reschedule the loan.

Alexander Paraschiy: The questioner during the press-briefing was trying to figure out the potential fate of the USD 3 bln Ukraine owes to Russia vs. other Eurobonds which are currently under restructuring discussion. Though the IMF spokesman made it clear that the Fund sticks to the principle of non-toleration on arrears to official bilateral creditors, we can hardly treat his words as the answer to the question; whether Ukraine will be forced to pay Russia or not.  In fact the IMF memorandum presumes a USD 5.2 bln gain for Ukraine from debt operation in 2015 which means that the Russian Eurobonds were also included in the plan.  We simply do not know what the alternative plan is, in case some of the creditors do not accept the suggested debt operation (including Russia). However, making the IMF program dependent only on Russian goodwill, which is in war with Ukraine, does not sound like the plan the IMF had in mind.