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Putin Is Becoming A "Vulture" Bond Investor
With Washington throwing its full faith and credit behind a new Ukrainian bond issue, it appears it’s time for Moscow to play spoiler to current debt restructuring talks between Kiev and its creditors. Russia is the country’s second-largest creditor after buying $3 billion in bonds back in the days of Viktor Yanukovych (who was once the victim of an attempted assassination by egg and who famously fled the country amid widespread protests last year) and now the Kremlin wants its money and isn’t likely to be amenable to any haircuts imposed on private creditors. Here’s more from Bloomberg:
Ukraine, after gaining a lifeline from the International Monetary Fund, included Russia’s bond among the 29 securities and enterprise loans it seeks to renegotiate with creditors before June. Finance Minister Natalie Jaresko has promised not to give any creditor special treatment. The revamp will include a reduction in the coupon, an extension in maturities as well as a cut in the face value, she said.
Russian Deputy Finance Minister Sergey Storchak said March 17 that the nation isn’t taking part in the debt negotiations because it’s an “official” creditor, not a private bondholder.
Should Russia decide to stick with a hardline stance on the negotiations (and it’s likely they will) it could not only embolden other prospective holdouts, but may indeed force Ukraine into a default:
Holding out can lead to two outcomes: Russia gets paid back in full after the notes mature in December, or Ukraine defaults. The former option is politically unacceptable in Kiev, according to Tim Ash, chief emerging-market economist at Standard Bank Group Plc, while the latter would likely start litigation and delay the borrower’s return to foreign capital markets, which Jaresko expects in 2017.
“Russia will be holdouts, to try and force a messy restructuring,” Ash said by e-mail on March 19.
If Russia holds out and litigates, there is a “real threat” that Ukraine will deem the Eurobond an odious debt, Lutz Roehmeyer, a money manager at Landesbank Berlin Investment GmbH, said by e-mail on March 23. This refers to a legal theory that a nation shouldn’t be forced to repay international obligations if they don’t serve the best interests of the country and its citizens.
Clearly, this is an opportunity for Russia to turn the restructuring talks into political leverage as it wrangles with Washington and the West over the fate of Eastern Ukraine. This is set against a particularly contentious situation in Eastern Europe that’s recently been characterized by a show of NATO force along the Russian border and the usual sabre-rattling out of Moscow (with the latter getting much louder this morning). As a reminder, just yesterday Vladimir Putin’s Security Council condemned what it called an “anti-Russian” US security strategy that it says is aimed at Russian containment by way of military posturing and the use of puppet governments. As far as Putin’s stance on Ukraine’s debt is concerned, well, he can always go the “nuclear route”:
The Russian bond has a covenant allowing the holder to call it if Ukraine’s public debt tops 60 percent of economic output, which the IMF said took place last year.
“It’s a kind of nuclear option, evaporating their leverage,” Rogge’s Ganske said. “If Russia accelerates, then Ukraine has to pay or default on it -- i.e. game over.”
More from Moody's on the restructuring:
The key driver of Moody's decision to downgrade Ukraine's long-term government debt and issuer ratings to Ca is the government's plan to restructure the majority of its outstanding Eurobonds as well as other public sector external debt and the rating agency's expectation that private creditors will incur substantial economic losses as a result of the restructuring. The debt operation is intended to provide $15.3 billion of the four-year, $40 billion external financing package agreed with the IMF and other multilateral and bilateral creditors. The package was approved by the IMF Executive Board on March 11.
Although negotiations over the specific details of the restructuring are only now getting underway, Moody's believes that the likelihood of a distressed exchange, and hence a default on government debt taking place, is virtually 100%. The bonds' recovery value will be determined by the terms of the debt exchange and is currently being discussed with creditors. The terms could include a grace period on principal repayments during the term of the IMF program, a reduction in the existing bonds' current coupons, which now average 7.1%, and a haircut on the outstanding principal.
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Awesome!
I was the first on ZH to advise/urge Moscow to call in their debts and to force them into default.
Amazing you can have such an impact on Putin. Well done.
HAHAHAHHAHAHAHAHAHA
as for the article, "One mans trash is another mans treasure."
Dow green by the session end
Holding out can lead to two outcomes: Russia gets paid back in full after the notes mature in December, or Ukraine defaults.
“Russia will be holdouts, to try and force a messy restructuring,” Ash said by e-mail on March 19.
"If Russia holds out and litigates, there is a “real threat” that Ukraine will deem the Eurobond an odious debt, Lutz Roehmeyer, a money manager at Landesbank Berlin Investment GmbH, said by e-mail on March 23. This refers to a legal theory that a nation shouldn’t be forced to repay international obligations if they don’t serve the best interests of the country and its citizens."
Ahhh, the Odious Debt Legal Theoy. I imagine if the Ukies invoke Odious Debt, for an instrument issued by a Sovereign Nation under English law, then the precedent is set for the Greeks to default on their debts for the same reason, that it is not in their national interest to repay them. Oh, and why would anyone ever trust the Ukies again when it comes to purchasing new debt, except for the loser IMF.
With Russia's very low external debt, Putin must be smiling in anticipation.
Time for the popcorn. Putin's not going to take a haircut on Ukrain debt. Maybe a little debt forgiveness in exchange for a strip of land leading to Crimea.
It should be for the people of Kherson, Odessa, etc to decide for themselves, by referendum, whether they want to be part of Ukraine or of Russia.
No horsetrading in Kiev and Moscow.
Three words that both Jim Willie and Jim Rickards agree are akin to a Financial nuclear option:
Emerging Market Funds
Western 401k accounts due to implode if Ukraine defaults on its debt.
Prepare the Debt Photon Torpedoes....
Putin doesn't think the US is TBTF.
Compete or die.
He's just doing his bit for the economy......
Like your worst enemy owning one of your friend's mortgages.
Hold my dick.
Really chuckles you act as though russia is a big deal outisde of land mass, drunks/crockheads and size of military. They have no source of income outside of energy even with all that land and all those people. That in and of itself should tell you something, there is something structurally wrong. All you humps dream of is some sort of alliance between russia and china and I will tell you something, russia has but litttle to offer China when compared to the west. Do you honestly think the Chinese are so stupid as to pick a fight while having to rely on one or more allies? Sun Tzu tells us differently, there nothing to gain choosing a small trade partner over a vastly larger one. Especially as the former has already shown that they are willing to take advantage of a weak China as the Russian occupied Chinese lands attest to.
The delusions of Grandeur that the West suffers from are incurable. See more at
http://www.mayoclinic.org/diseases-conditions/narcissistic-personality-d...
What's that Oceania-moron? Russia has nothing, hm? No idustry? Produces nothing? The first country to reach outer space and send a man into it has nothing to offer? You must have confused it with some Western country, for, apart from Germany which does produce a lot of things, no Western country produces much of anything aside from lies, propaganda, Ponzi schemes and loads of shit of course. Long gone are days when the so-called West have produced anything of worth. Do you like taking stuff into your ass perchance, hm, libtardo? Libtardos love that. Do you have a favourite object you like to insert into your filthy shithole, libtardo? hehe
The same thought occurred to me...What we produce now is weaponized bullshit under the Declining Empire brand.
Even those are made in China...
the west is a syphillis infected, mentally dellusional trading partner on the level of a Al Capone. This is why China is building an Asian trading unit with India, Pakistan,Iran and other nations of Asia that will eventually contain more than half the world's population and the area of greatest growth potential while the west declines....or will India's median household rate of $4000 a year rise to the American $50,000 or will America's drop while India's rises?
Really chuckles you act as though russia is a big deal outisde of land mass
the west is a bigger trade partner on paper. however you are ignoring all of the rediculous taxes and hoops that the west makes their trade partners jump through to do business. the advantage of trading with the west is an illusion created to hide the fact that they will force a regime change and bomb you into democracy unless you turn a blind eye and fork over your profits to GS and friends.
They don't force democracy, they support any style of government that will serve US's interests. Saudi Arabia is hardly a democracy and in Ukraine, the US overthrew the democracy.
Huh, isn't land mass like a big deal and stuff? There's stuff like under it and stuff. Remember a few hundred years ago how like people want to come to the New World? It was cuz land mass.
And again, that will cost them Russkies.
The IMF will have to take the Russkies out of their Uke bonds or the Creditors' Cmte. meeting could get overly heated.
Russia's moves to decouple economy from the neoliberal monetary monopoly
$3B?!!! Phht. Meh. Mr. Yellen wet farts that much every day.
But somebody has to write a check which is hard to do when your finger is pointing at somebody else.....
It's not a vulture. It's a Double Headed Eagle. It flies like an empire, it squawks like an empire, it behaves like an empire. Moscow is the Third Rome
and no, this is not an anti-Russian comment. Russian Nationalism is demanding it. The Russian People are currently behind it. They would also prefer to see this war stop, which is something I'm thankful for. The only ugly part is this "NovoRussyia" thing, but only hardliners are really behind it. Question is only: will those hardiners be restrained? We can see in the US how hard it is to restrain the Neo-Cons
If you were Russian would you want a NATO base on your border? My guess is you probably wouldn't.
I have yet to see NATO attack it's neighbors so why should it? Unless of course you have dreams of empire and an opposing military force might upset your plans.
Short memory... http://en.wikipedia.org/wiki/Category:Wars_involving_NATO
Ask people in Serbia what they think about NATO.
for fairness, you should also ask people in Kosovo what they think about it
Your avatar name is fitting, because you clearly have bought into the 1984 news speak.
Hahaha, you're kidding right?
Ummm......LIBYA ?????
I hope you were paid for making such a stupid comment. osovo is a good place to start. libya could be a second stop. the list is long sweety.
... I have yet to see NATO attack it's neighbors
Dear God, not only are you a patented ignorant moron, you also like to brag about it ! Ever heard of such places as Serbia, Libya or Iraq ? That's for NATO direct involvement, without counting CIA's interventions to "fix" the rest of the world... 1984 was written for intellectual toads like you !
Serbia was NATO's finest moment, a time when it could be in charge and wow the world with perfect execution and exceptionalism. I will spare you the details.
He's a EU serf ! His country has been under US occupation since before he was born, so he doesn't know better. He's only too happy to felate his masters, for a chance to a (slightly) better life. A propagandist is almost as worse as a straightforward traitor, among human characters. The good news though: you live by the trade, you also die by it...
thank you for this valuable lesson about myself. or our allies. while teaching it to me, you also explained a lot about yourself
Yeah, whatever ! You can now take your hard earned info, and shove it... EU troll. Can't wait for the moment when Euro (your greatest "creation") will finish you all for good !
Perhaps Russia will dismantle Gantsevichi or Soltsy as a gesture of goodwill show theres no need for bases and radar near your neighbours?
"If you were Russian would you want a NATO base on your border? My guess is you probably wouldn't."
of course I would not. but this is not my point. my point is that Russia was quite landlocked for centuries
Tsar Peter the Great had to build St. Petersburg in order to have a good harbour towards the Baltic Sea. Later, the Russian Empire built Vladivostock, the "Rule the East" harbour in the pacific
from a proper historic perspective, Russia has always tried to "break out" from a geopolitical situation that was dictated first by geography, and second by other powers
further, from the same perspective, Russia is the only colonial power that did not have to cross seas to reach virgin or near-virgin territory, hence the conquest of Sibiria and it's Far East
as a simple example, read the story behind the Battle_of_Port_Arthur. Which is part of the Russo-Japanese_War of 1904-1905, where the Russian and the Japanese empires were fighting about the dominance over Korea and Manchuria
a less simple but probably even less known example: the Russo-Persian_Wars.
in the first one, Tsar Peter used his cossacks to try to grab Persia. in the second one, Catherine the Great repeated the attempt. She was more lucky in annexing Crimea, though, in a related conflict. Both had some land grabs out of it. in the third one, Tsar Paul first annexed Georgia, and then Tsar Alexander I defended his position against Persia. Which had to be defended again in the fourth war
in the fifth of those conflicts, the two usual rivals of the Great Game, England and Russia, helped each other with the Anglo-Soviet_invasion_of_Iran of 1941
yes, "NATO Encirclement of Russia" is a good meme. Superficially valid, and yes, even in some depths. but it has some limits, in it's factual and historic context
fact is that Russia is pushing... as usual, if you look at it over the centuries. So yes, it is an empire. With frontiers, and contested areas around it... which have then non-Russian military bases
Maybe the expansion of NATO the last 20 years has something to do with that? I think you are correct Ghordo, the madmen in Wash DC (Zionist Neocons) have forced this situation. Question is, why?
Russia has understood the world is a multipolar world, the US are still struggling with that notion. Comparing both "threats" is ridiculous. Russian troops are on its soil, have been involved here and there at their borders. What about the US ?
I don't know a single person who condones any act of war.
But that little fact doesn't seem to matter...
Stephen Harper thinks we should hunt Isis to the ends of the earth
http://www.nationalpost.com/m/wp/blog.html?b=news.nationalpost.com/2015/...
They don't have to go to the ends of the earth to stamp out ISIS, just to TelAviv, Riyadh, and Langley...
Double headed eagle is Byzantium heirdom, you stupid Zionist employee. Have you ever heard of Byzantium? Appears not. And you haven't heard for Novorossia either, right parasite? Well, that's the land Bolshevik Lenin added to Ukraine USSR in 1922. Here, retardo! Learn something!
http://www.acting-man.com/blog/media/2014/03/Ukraine-History.jpg
See that blue territory there? That's Novorossia.
And this is Byzantium.
http://en.wikipedia.org/wiki/File:Byzantium_in_1170.PNG
Zionist scum has no knowledge of even basic history, right parasite? Are you paid well in that Zio-institution? Parasites often are unfortunately, but that is something waiting to be changed, and hopefully we won't have to wait too long.
amazing, the activities on ZH. what is your point exactly about the double headed eagle? of course its Byzantine, in it's origin
the Byzantine Double Headed Eagle is also the forefather of the Austrian Empire's Double Headed Eagle, now the Austrian Republic's Double Headed Eagle and the Russian Empire Double Headed Eagle, now the Russian Federation's Double Headed Eagle
here, read this Coat_of_arms_of_Russia. And this Coat_of_arms_of_Austria
I find your "Zio-scum" label interesting. But even more interesting is that you have very little understanding of the concept of "Novorossyia"
It's a political banner. From the times of Catherine the Great. It implies that the whole of Ukraine ought to come back to Mother Russia. Despite any previous treaties, despite any factual amount of Russians living there or not
And this is also the reason why you don't find any pro-Russian apologists here willing to say where the future frontiers of Russia ought to be. Because it's all for grabs. Ukraine, Moldavia, Georgia, the Balts, whatever, and possibly even more
so yes, I repeat that the Novorossyia proponents are imperialists and revanchists, willing to serve new maps anytime, depending from what is open for grabs. It should not be soooo hard to admit
Novorossyia proponents are the Russian hardliners. Very similar to the US Neo-Cons, with the exception of a preference for "hard" empire building versus "soft" empire building
Someone learned how to use html tags.
I thought about complimenting you on your keen observation skills, sadly the underlying ignorance of your comment demotes it to a "Nice try"
Welcome to fight club. Rookie.
[and no, this is not an anti-Russian comment] LOL.
Just jot down all the Merican bases including occupied Europe and Japan.( Notice how the Russians and Chinese conveniently placed their borders beside most of those bases)
Then jot down the last ten years of military type spending.
Then jot down the number of nations bombed into oblivion and/or invaded.
Now do the same with Russia. Heck even add the arch enemy China.
Then ask yourself just who is the wannabe empire?
Now if I were Russia and had NATO tramping up and down my border with their armored weapons, overthrowing and arming neighboring governments, I would be arming up just as Mr. Putin is.
Sadly history indicates Russia eventually will turn empire as most nations who armed up to protect themselves usually do. On that your probably right. Let's just hope they do better than the u.s. has.
Amazing how it all comes back to debt, bankers and politicians, huh?
This is interesting:
US Declassifies Document Revealing Israel's Nuclear ProgramObama revenge for Netanyahu's Congress talk? 1987 report on Israel's top secret nuclear program released in unprecedented move.
http://www.israelnationalnews.com/News/News.aspx/193175#.VRQoWvnF9qU
Fine, but all the people who cared knew... and the others won't give a shit.
I hate to say it, but there is nothing more disgusting than Israel website comment sections. Talk about angry, warmongering, programmed a-hole nut jobs.
Thanks, you gave me a reason to go and read, let's get some popcorn.
Tough reading, grab a few beers to go along with the popcorn.
And people complain about American's being sheeple? Yikes. Israel is setting a new standard.
But, to be fair, I suppose the mindset of living there is something one just has to understand. Constant conditioning of all sorts, external and internal. Does not bode well for healthy perspective though.
This is hilarious !
Martin McDonald Maybe? Jarrett is without doubt, his handler. She has been since his days in Chicago. Hillary also has a handler. Now we need to locate the other Iranian handlers who are controlling our politicians. I bet Jeb has a handler.
Alex Bisman Instead of Netanuahu's freezing the Jewish construction in Jerusalem, he should have retaliated to [the plans of] that idiot Obama by lifting all freeze on Jewish settlement construction everywhere, and, instead, freezing ALL Arab construction in Israel and all of the territories where those parasites live. We need Netanyahu to tell that White House anti-Semite: extortion and blackmail against Israel won't work!'Samuel Reno · Louisiana State University in Shreveport
Nathaniel Talcott You mean the land God gave His people..the Jews. There is no Zionist state. There is Israel and it belongs to the Jews.' The notion that {some} Jews are disloyal to their host country has long been one of the most pernicious anti-Semitic canards. lol.Angry warmongering , programmed nut jobs , yes the trauma of circumcision triggers the psychopath gene in 2 week old babies . Unfortunately there is no de-programming once triggered. 2% to 5% of the population carries this gene so circumcision is a surefire way of triggering 100% of the potential male psychopaths in any given population . I understand that a large percentage of American males are also circumcised regardless of being born into the circumcision cults of Islam and Judaism. Maybe this has something to do with the ease with which American males can be sent off to war by their Banker tribe owners and the frequency with which atrocities are committed by the American military . Is it possible that the originators of this insane practice somehow knew this back whenever and that this was by design ?
A nuclear-free Middle East is the only hope to avoid Armageddon
An Israel-free Middle East is the only hope to avoid Armageddon.
Vlad totally understands how the western banks keep score. They'd screw anyone at the drop of a hat.
Screw unto others before they screw unto you.....
Hold on - your particular view of Putin aside... why on earth should the Russian Federation take a loss to help Ukraine pay for its own economic ass-rape by the IMF, and ongoing enfoldment into NATO?
As to odious debt - I don't believe the standard is not wanting to pay because you want to use what money you've borrowed from others to buy weapons from America to kill your own citizens - but I'm no lawyer, granted.
have a looksie: http://www.globalresearch.ca/imf-ukraine-must-now-steal-1-5-billion-from-russia-to-buy-weapons/5438508
USA testing the waters for their own default.
what no natural gas leverage by russia?
oh, must be springtime
Dow green on the London close...
as predicted earlier this morning.
ur all welcome.
Putin is the grandmaster, he is Neo in our matrix, he is One-Above-All in our Marvel Universe, he is Eru Ilúvatar in our Lord of the rings universe, he is the best stock picker and bond investor. Rumors say that he tought Chuck Norris everything he knows. He is the red beast, the one and only - Mr. Putin.
Well, he's no Barry Obama or Hunter Biden.
But he does seem to be looking out for the Russian people.
What a dick, huh?
rightttttttttttt...... russia is the modern promised land and Mr.Who unifide quantum mechanics and general relativity is the saviour of all its people. Crimea has been saved from all the doom and gloom of westeros
yeah thats all empty nonsense and misplaced sarcasm.
didn't the crimeans vote to rejoin Russia?
Do you not care about their will - and I'm asking seriously.
I'll ask you to read this: Crimeans Keep Saying No to Ukraine | Consortiumnews
And I'll take your response seriously. I'm agnostic on Putin, but plainly see NATO expansion and American aggression. As well as a planned IMF riot on Ukraine....
oh yeah, they voted alright. Even the dead have risen and voted, because in some areas participation rate was over 100%. Thats the true power of Putin.
Those who live in glass houses shouldn't throw rocks applies here,,, like our election system is so perfect and wonderful... LOL. Sleeeeep,,,, Sleeeep....
Jealous?
Now return to work slave paying your freedum loving gov so it can bomb more nations to democracy.
Thats a nice comeback... haven't heard that since kindergarten.
If I had talked like that in kindergarden, I would have gotten my ass whooped. But that was a long time ago.
Yes Putin is the only "bond vulture" ...
Can some one please explain to me how these greedy bastards have become legally empowered to hold average citizens hostage over bond coupons?!?
These fucking idiots are the ones who bought insolvent government paper!
How is that anyone's responsibility but their own?
Didn't USA courts already decide that vulture funds get to hold out to screw another sovereign country? Damn precident based law regarding debt restructuring.
-edit- spelling mistake corrected
Argentina?
Sort of like when cop kills lowly citizen,,, citizens relatives sue the city,,, not the cop... OR when banks go underwater lowly citizens pay up.
When gov sells bonds they are sold in the lowly citizens name,,, therefore lowly citizen responsible.
Now, STFU and pay!
The best part is that by law I have to pay.
Looks like I need a gun after all. Then people will start to pay me
If the IMF/USA consider you to be a "good creditor" they will force the debtor nation to pay up in full, including accrued interest and legal expenses. If they consider you to be a "bad creditor", they will decide how much you can get back and when (if ever).
Whereas the vultures that are eating Argentina are good creditors, you can be sure that Russia is a bad creditor. Nothing will be repaid until the US lifts its sanctions; and even then, it will be discounted.
For a while it looked like Putin was losing.
Now it looks more like Putin is winning.
Bumbling Barry needs to stop effing up international issues and leave it to the real men; otherwise, Larry Sinclair is liable to get jealous. Barry can barely handle drone strikes against wedding parties in bf Afghanistan and destitute Somali teenagers, what makes you think he can square off against real leaders who actually understand statecraft and are ex kgb? Ffs.
Putin is playing chess, NATO is playing checkers.
I believe the idea first surfaced in Popular Mechanics Magazine years ago but the idea of linking Russia and the U.S. has resurfaced.
http://siberiantimes.com/business/investment/news/n0160-plans-for-new-tr...
http://www.msn.com/en-ca/news/world/russia-plans-super-highway-linking-u...
$3 billion? Seriously? We find chunks in our stool bigger than $3 billion. Get real.
Your stool must be some pretty toxic shit...
[ This is set against a particularly contentious situation in Eastern Europe that’s recently been characterized by a show of NATO force along the Russian border and the usual sabre-rattling out of Moscow (with the latter getting much louder this morning).]
So NATO is simply making a show of force (defender of peace, freedum and the Merican way) ) while Russia is sabre rattling (world aggressor) ?
Just exactly WHO is on WHO's border? LOL.
What is particularly amusing is the attitude of Central Europeans such as the Poles towards the Ukrainians (lowly Ruthenians) whom they consider to be subhuman garbage.
There is also a dormant rivalry between Poland and the Ukrainians for disputed territories along a border that has been rewritten many times through history.
William, with all due respect, Ruthenians may be Ukrainian citizens but they are not (ethnic) Ukrainians.
as noted above - what's puzzling about the US is the facot, especially post Kosovo - it is actively denying the right of Crimea, long an autonomous province, and formerly part of Russia itself until 70 years ago the USSR attached it to Ukraine SSR without asking them - likely to weaken the Russian SSR... they've voted. They prefer Moscow to a US puppet regime that hates Russians and wants to rape the country for the IMF and dual citizen oligarchs...
https://consortiumnews.com/2015/03/22/crimeans-keep-saying-no-to-ukraine/
Forget Putin - he's a politician. But why doesn't what the Crimeans want matter?
China, with its many US treasuries, is watching and taking notes for future reference.
When he talks about America he sounds like Reagan talking about Russia.
He has learned well.
PUTIN CHANGES NAME TO ESCAPE US SANCTIONS
Vladimir is now called Ras and should be addressed as President Ras Putin.
Source: www.financialpaparazzi.com
Shit website of yours .
<<< This is just a setup to trigger the final worldwide Ponzi debt/currency collapse.
<<< Ukrainian debt holders are all behaving as rational actors in their own best interests.
True, these are not mutually exclusive.