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Ukraine Makes Crucial Eurobond Interest Payment, Averts Debt Default

Ukraine has made a crucial Eurobond interest payment that kept the war-torn country from slipping into technical default and potential isolation from global credit markets.

AFP reported that money to cover the $120 million debt was transferred as soon as business hours began in Kyiv on July 24.

Cash-strapped Ukraine now has two more months to negotiate a debt-restructuring deal before it faces a tougher deadline to make principal and interest payments of more than $500 million on another note on September 23.

Franklin Templeton and three other U.S. financial giants own about two-thirds of the debt upon which Ukraine is trying to find savings of $15.3 billion during the coming four years.

That target is part of a $40 billion global package the International Monetary Fund (IMF) patched together to help Ukraine avoid an economic implosion exasperated by the war with pro-Russian separatists in the eastern part of the country.

The IMF signaled on July 23 that it could release $1.7 billion in fresh funds next week even if Ukraine failed to reach the private-sector debt-relief deal.

Based on reporting by AFP, AP, and Reuters