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Russia Hints It May Force Ukraine Into Default, "May Ask Ukraine For Its $20 Billion Share For Ex-Soviet Debt"

Tyler Durden's picture


Rook to G7, check.


Pidgeon playing checkers response time.

This should come as no surprise as we warned of at least $3b in bonds that are due very soon...

the Ukraine owes $3 billion to Russia in bonds that have been issued under UK law. One of the stipulations of the bonds is that if the Ukraine's debt-to-GDP ratio should exceed 60%, the bonds will become immediately callable.


Once the Ukraine gets funding from the IMF,  this is of course going to happen right away – its debt-to-GDP ratio will then most definitely exceed 60%, so the first $3 billion of any aid the Ukraine receives in the form of loans will right away flow into Russia's coffers.


Of course there may be litigation first, but as Greek bondholders have found out, all those who held bonds issued under UK law were actually paid in full, while everybody else had to accept the 'PSI' and could basically go pound sand.

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Mon, 03/17/2014 - 13:10 | 4559301 jaap
jaap's picture

Change of control clause?

Mon, 03/17/2014 - 13:15 | 4559325 The Phu
The Phu's picture

Lately, I've been quite impressed with Putin's gamesmanship around the events that have unfolded in Ukraine.  This one, however, has me scratching my noggin' wondering under what legal concept Russia can force down Soviet debt 21-22 years ex post facto...  Thoughts anyone??

Mon, 03/17/2014 - 13:17 | 4559331 Transformer
Transformer's picture

We now wait for the Pidgeon to respond.

Mon, 03/17/2014 - 13:26 | 4559370 Stoploss
Stoploss's picture

THROW IN THE TOWEL!!!!!!!!!!!!


How many PSI in a pound of sand?

Mon, 03/17/2014 - 13:31 | 4559411 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

Russia knows they are never going to pay them back. Forcing them into default really just forces a default onto the western banks. Obammy is still strutting around on the table in his own feces, moron.

Mon, 03/17/2014 - 13:49 | 4559525 Oh regional Indian
Oh regional Indian's picture

Rook to G8, brilliant!!!

Mon, 03/17/2014 - 13:57 | 4559571 TruthInSunshine
TruthInSunshine's picture

In Putin's Russia, outstanding debt compounds YOU.

Mon, 03/17/2014 - 14:00 | 4559596 aVileRat
aVileRat's picture

Can't collect on a Treasury you do not accept the existence of.

Of course, if you have no intention of collecting on the debt, but want to invade a country, then go nuts.


Mon, 03/17/2014 - 14:09 | 4559653 Manthong
Manthong's picture

Don’t bring  a personal feces covered checker disc to a chess match.

Mon, 03/17/2014 - 14:24 | 4559742 strannick
strannick's picture

I think that was Russian Rook to G7 not G8

Mon, 03/17/2014 - 14:46 | 4559856 Anusocracy
Anusocracy's picture

President Jemima better learn how to make blintzes for the Boss.


Mon, 03/17/2014 - 15:17 | 4560037 StacksOnStacks
StacksOnStacks's picture

The EU/US don't really plan things out well, do they?  Didn't they know all of this would blow up in their face? Half the world did.

Mon, 03/17/2014 - 14:57 | 4559921 Oh regional Indian
Oh regional Indian's picture


Mon, 03/17/2014 - 13:56 | 4559563 TheGoldMyth
TheGoldMyth's picture

Yes all of "Russia" collectively, including the fine print. I didn't know all the private banks are a western breed though

Mon, 03/17/2014 - 14:21 | 4559725 Stuck on Zero
Stuck on Zero's picture

The proper Ukrainian response would be to bill Russia for $1T to clean up Chernobyl.


Mon, 03/17/2014 - 17:31 | 4560673 schadenfreude
schadenfreude's picture

At least USSR buried the reactor under tons of concrete. What happened at Fukushima?

Mon, 03/17/2014 - 13:19 | 4559349 TheLooza
TheLooza's picture

The word "Imputiny" begs to be coined....

Mon, 03/17/2014 - 13:22 | 4559374 The Big Ching-aso
The Big Ching-aso's picture

I think this is like squeezing borscht from a turnip.

Mon, 03/17/2014 - 13:23 | 4559360 Ghordius
Ghordius's picture

the legal concept you are looking for is the ancient "Might Makes Right". it has been expounded by every hegemon in history. you'll find exponents of this ancient legal concept both in the Russian Duma as in the US Congress, etc. etc... look it up, it's right next to "Right or Wrong, My Country", "Vae Victis" and "It's All About Money"

Mon, 03/17/2014 - 13:25 | 4559393 TheGoldMyth
TheGoldMyth's picture

I care not who your leaders are, just let me tell them what to do no matter how stupid/etc they look to the untrained observer.

Mon, 03/17/2014 - 13:34 | 4559434 ThirdWorldDude
ThirdWorldDude's picture

That's just plain ignorant of you, Ghordo.

Your legal concept would be based on raw power if Russia was demanding war reparations, but in the case of state succession, there's actually a Vienna convention regulating this.  Ukraine is a signatory of the Convention. 

Mon, 03/17/2014 - 14:10 | 4559659 gmrpeabody
gmrpeabody's picture

Signatures ain't what they used to be...

Mon, 03/17/2014 - 14:17 | 4559696 WMM II
WMM II's picture

"The Convention has not yet entered into force."


from: https://treaties.un.org/Pages/ViewDetails.aspx?src=UNTSONLINE&tabid=2&mt...


unless i am mistaken....



Mon, 03/17/2014 - 15:11 | 4560012 ThirdWorldDude
ThirdWorldDude's picture

You are correct, though it didn't stop former Czechoslovakia and Yugoslavia from applying that same Convention when their respective successor states were bargaining on who gets what. It's a long and tedious process that can at best take 4-5 years to accomplish.

Mon, 03/17/2014 - 13:23 | 4559381 eclectic syncretist
eclectic syncretist's picture

I think this market is a piece of crap mirage build on a foundation of delusions.

Mon, 03/17/2014 - 13:32 | 4559422 williambanzai7
williambanzai7's picture

Find the protocol or treaty originally splitting off the Ukraine from Russia and you will probably find their answer. The Russians probably did not say, we hereby unilaterally release you from your pro rata share of the international debt obligations with no strings attached.

Mon, 03/17/2014 - 13:37 | 4559455 firstdivision
firstdivision's picture

Contract law, its a bitch when you're on the wrong end.

Mon, 03/17/2014 - 13:47 | 4559515 DIgnified
DIgnified's picture



Just a thought.   Ive read that the Civil War was actually caused by souther states not wanting to be put up for collateral to England for money we owed them for improvments on the land captured in the revolutionary war.  Just a theory.  

Mon, 03/17/2014 - 15:22 | 4560062 JoBob
JoBob's picture

Just a theory, but not a very good one.

Mon, 03/17/2014 - 15:01 | 4559948 QQQBall
QQQBall's picture

IMF to the rescue????

Mon, 03/17/2014 - 15:21 | 4560052 kashey
kashey's picture

ZH didn't present the complete picture.
First Ukraine demanded from Russia that it must compensate population's savings having been held in then USSR only/major savings bank Sberbank, which evaporated during hyperinflation before/immediately after collapse of USSR.
So Russia has just responded with reciprocal claim.

Mon, 03/17/2014 - 16:58 | 4560525 chemystical
chemystical's picture

Hey, if 18-yr old Germans can be forced to pay billions/yr in reparations to 'claimed' Hollowhoax survivors in ISR for something that allegedly occured 70 years ago.. then why not?

The meandering territorial lines known as ISR has a govt office that acts as the pay master and spokesperson for all Jew Hoax survivors worldwide.  Just last year the ever-increasing survivors asked for a raise, and Germany said okey dokey.  Nevermind that a few years a go some internal inspectors at that ISR bureaucracy  found something like 15 billion dollars of fraud that was then swept under the table.

I personally am pushing for reparations from Germany, England, American Indians, Columbia, Peru, Mexico, Iran, Iraq, Afghanistan, etc etc.  Of course my PR dept's budget isn't quite so large.  Maybe the US govt can likewise create depts specifically for me within Commerce and Justice.  Maybe 4 dozen govtson 6 continents can be squeezed into creating myhoax museums - particularly those govts that didnt have a fucking thing to do with myhoax.

Mon, 03/17/2014 - 18:23 | 4560867 MeelionDollerBogus
MeelionDollerBogus's picture

with ovens, gigantic body counts & detailed nazi records of the executions it seems preposterous that in 2014 you or anyone else could pretend that is a hoax.

Mon, 03/17/2014 - 21:39 | 4561477 Independent
Independent's picture

I dont know the Jews were always top notch forgerers and they even acknowledged it in Schindler's List when they were faking German documents.  How easy would it be for them to make up some bogus tally sheets of people executed.  The Jewish Mafia has been around probably the longest of any organized crime element in the world.



Tue, 03/18/2014 - 02:29 | 4562054 MeelionDollerBogus
MeelionDollerBogus's picture

You can't "forge" millions of corpses much less magically incarnate all the ovens and gas chambers immediately after the fall of the Nazis, much less forge all the records of the executions made by the Nazis.

What's really sad is to refer to this event as "the" holocaust because it certainly isn't the biggest, wasn't the first, wasn't the last and certainly Jews are not the only victims of holocaust in history. That special pedestal shouldn't exist because making a special history only for one genocide simply disregards the seriousness of all the others.

Mon, 03/17/2014 - 13:11 | 4559302 90's Child
90's Child's picture

Impressive, past few weeks Putin sure has been handling everything like a boss.

Mon, 03/17/2014 - 13:30 | 4559408 krispkritter
krispkritter's picture

 "Hello, Office of the Ukrainian President?"  "Sir, there's a man on the line with a Russian accent and he mentioned kneecaps?"

Mon, 03/17/2014 - 13:38 | 4559461 Crash Overide
Crash Overide's picture

When the US and EU are done with Ukraine they will be begging to join Russia. I feel bad for the citizens, they are the biggest losers in all of this... As an American I can sympathize, our country was taken over and raped a long time ago.

We still have our freedom and guns though right?

It's funny, my family left Poland/Ukraine a long time ago to escape the Germans and Russians and got a different kind of boot on our neck in the USA. These assholes are everywhere, ENOUGH!

Mon, 03/17/2014 - 13:11 | 4559305 JoBob
JoBob's picture

Let the games begin!

Mon, 03/17/2014 - 13:12 | 4559310 yogibear
yogibear's picture

The more countries Russia takes the higher US and European stocks go.

Putin, you have all those countries like Poland, Hungary, Romania, etc to take back that should boost US stocks to record highs. 

Mon, 03/17/2014 - 13:55 | 4559556 hungarianboy
hungarianboy's picture

Yogibear, Please have a look at this map before saying things you just said.



I think Ukraine should give back some of it's territory to the Hungarians! Ohw and some other countries to.

Tue, 03/18/2014 - 11:47 | 4563397 Random
Random's picture

You are indeed smart, i tip my hat to you sir! There is only one small detail that you might have overlooked and if i may I'd like to point it out. The countries of Europe are named after the people that inhabit them. As you have pointed out, the names of the countries are: Poland (inhabited mainly by Poles), Hungary (inhabited mainly by Hungarians) and Romania (inhabited mainly by Romanians). Could you please enlighten us what right Russia has in taking territories belonging (by way of possession, as in 9/10 of the law if you like) to other people? And while at it could you also please explain on what basis can Russia take these countries Back (as a rightful owner as you eloquently put it)?

Mon, 03/17/2014 - 13:12 | 4559311 maskone909
maskone909's picture

So ukraine defaults....
Does russia step in and seize ukraine as a collateral backed asset?

Mon, 03/17/2014 - 13:14 | 4559322 yogibear
yogibear's picture

Wall Street loves it. The US fund managers buy big as Russia takes back more countries.

Mon, 03/17/2014 - 13:17 | 4559339 maskone909
maskone909's picture

Also, couldnt the russians and chinese force the usa into default by simply taking comex delivery?! Are we going to be speaking chinese by 2015? Lmfao this is getting good

Mon, 03/17/2014 - 13:29 | 4559404 Kaiser Sousa
Kaiser Sousa's picture

been working on my mandarin...

"i kno phunk biatch..."

Mon, 03/17/2014 - 13:33 | 4559425 SSN715
SSN715's picture

Not sure if I should be learning Russian or Chinese.

Mon, 03/17/2014 - 13:52 | 4559546 Yttrium Gold Ni...
Yttrium Gold Nitrogen's picture

Do not limit yourself to one or the other. Learn both.

Mon, 03/17/2014 - 13:18 | 4559344 disabledvet
disabledvet's picture

lot more than gas in that country.
Already food supplies in Europe are being disrupted. If the trains grind to a halt then indeed...."Houston, we've got a problem."

Certainly a European problem.
Worth going to War over?
Tens of millions of dead bodies buried in that wasteland.
Wouldn't be the first time.

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