Wednesday, January 14, 2015

Ukraine currency, sovereign woes to push more and more firms into default |

With an economy in meltdown, a currency that has tanked 45 percent and a possible sovereign default ahead, more and more of Ukraine's companies are finding themselves unable to repay overseas debt

While a relatively modest $12.4 billion in private sector debt falls due in 2015, according to International Monetary Fund estimates, it still exceeds Ukraine's total hard currency reserves and is double what the government owes foreign creditors next year.

Many companies and banks have already fallen behind on debt payments. Metals firm Metinvest for instance last week swapped 2015 dollar debt for bonds maturing at the end of 2017, and agricultural producer Agroton asked bondholders' consent to hold off next year's coupon payments until 2016.

Agro firm Mriya, pipe manufacturer Interpipe and banks First Ukrainian International Bank, VAB, Nadra, and Finance and Credit Bank are also in trouble.

Bonds of all these companies have fallen sharply, with the Agroton issue for instance now valued at 25 cents on the dollar and Mriya's 2016 bond at 15 cents.

And as company after company reports steep falls in revenues, investors are bracing for more trouble ahead.

"I think that almost all the Ukraine corporate sector will restructure," said David Spegel, head of emerging debt at BNP Paribas.

Complete story at - RPT-Ukraine currency, sovereign woes to push more and more firms into default |

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