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Ukraine central banker says creditors must accept Privatbank bail-in
February 7, 2017 / 1:46 PM / 10 months ago

Ukraine central banker says creditors must accept Privatbank bail-in

KIEV, Feb 7 (Reuters) - Ukraine’s central bank is ready to meet bondholders of recently nationalised Privatbank, but it will not change its position that a bail-in of their bonds was justified and legal, a deputy head of the regulator said on Tuesday.

Ukraine took Privatbank, the country’s largest lender, under state control in December, but a group of the lender’s creditors has protested against a decision to convert $555 million worth of Eurobonds into equity and threatened legal action.

“We are prepared to meet with representative of the bondholders. We are prepared to lay out our position and believe that our position is legal and reasonable from a banking practice perspective,” deputy central bank chief Kateryna Rozhkova told journalists.

“Professional investors should evaluate these risks and should be prepared to bear them if something happens with the bank,” she said, adding that she would meet the bondholders’ representatives later on Tuesday.

Privatbank was taken under state control with the backing of the International Monetary Fund, with which Ukraine has agreed a reform programme in exchange for loans worth $17.5 billion.

The nationalisation has so far cost taxpayers $4.3 billion and an upcoming audit will reveal how much more might be added to the bill. (Reporting by Natalia Zinets; Writing by Alessandra Prentice; Editing by Andrew Heavens)

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