Ukraine is headed straight toward a full-scale default on its public debt, which currently totals $70 billion, of which $40 billion is owed to foreign creditors, about half of whom are private lenders, while the others are official state or public entities (such as foreign governments and international financial institutions).
Strictly speaking, Ukraine has already defaulted, because on September 23 Kiev did not make its scheduled payment on a $500-million Eurobond. In this case, responsibilities to the private (not state or public) Eurobond holders were not met. According to some sources, these private bondholders are the Aurelius Capital and Elliott Management hedge funds, which are notorious financial vultures. A ten-day grace period ended in early October without any moves from Kiev to pay its debts. The International Swaps and Derivatives Association (ISDA) issued a verdict of «technical default» on October 5, but soon the word «technical» will have to be removed.