Bond guru facing Ukrainian haircut
Published 16/05/2015 | 02:30
Foreign creditors must agree to the "legitimate" deal offered by Ukraine in talks on restructuring some €20bn worth of its debt, Prime Minister Arseny Yatseniuk said yesterday.
It will be a blow to Michael Hasenstab, the bond guru who reaped huge returns for his Franklin Templeton firm betting Ireland would not default after the financial crisis.
The same firm is now among Ukraine's biggest creditors facing losses if the war torn country imposes so called haircurts.
Franklin Templeton and other investors holding about €8.5bn of bonds said on Tuesday they plan to reject any haircut proposals, while the Finance Ministry has accused creditors of being unwilling to negotiate in good faith.
Speaking to parliament yesterday, Prime Minister Yatseniuk said bondholders should appreciate the state of Ukraine's finances.
"The country is at war. We have lost 20pc of our economy. We approached creditors with a clear position on the procedure and terms of restructuring," he said.
"We ask, appeal and insist that external creditors appreciate the current situation and accept Ukraine's offer, which is legitimate and a way to help Ukraine."
The creditor committee said on Tuesday it plans to rejects any haircut proposals.