MOSCOW Russia will file a lawsuit against Ukraine after Kiev failed to repay a $3 billion Eurobond and $75 million of interest by Dec. 31, the Russian finance ministry said late on Thursday.
The decision was expected as Russia has repeatedly said it would regard non-payment as a default and file a lawsuit. The Eurobond was issued by the government of former President Viktor Yanukovich in late 2013 and bought by Russia in its entirety.
"A corresponding lawsuit will be filed in an English court in compliance with the established procedures," the ministry said on its website.
Ukraine's Prime Minister Arseny Yatseniuk had repeatedly said that Ukraine would not repay the Eurobond at maturity on Dec. 20 and that Kiev was ready to fight the issue in court.
A grace period for repayment expired on Thursday.
The bond was issued just two months before Yanukovich fled in the face of bloody street protests triggered by his seeking to halt Ukraine's swing toward European integration in favor of closer economic ties with Russia.
Ukraine, which has separately reached an agreement with private creditors to restructure its sovereign and sovereign-guaranteed debt, insists the Eurobond is commercial debt and that it cannot offer Russia a better deal than other creditors.
Russia says it is official, country-to-country, lending and outside the scope of Kiev's agreement with private creditors.
After Yanukovich fled, Russia annexed Ukraine's Crimea in March 2014 and has been accused by Ukraine and the West of backing a rebellion by separatists in eastern Ukraine.
(Reporting by Vladimir Soldatkin; Additional reporting by Natalia Zinets in Kiev; Editing by Jason Bush and Catherine Evans)