diff --git a/ets2panda/checker/ETSchecker.cpp b/ets2panda/checker/ETSchecker.cpp
index 911c0a1ea8be2d2e72f757fe08a11786dded1a5e..764abb07da69818085f33e71aaa65a3dfae42a3a 100644
--- a/ets2panda/checker/ETSchecker.cpp
+++ b/ets2panda/checker/ETSchecker.cpp
@@ -756,4 +756,11 @@ void ETSChecker::InsertExtensionGetterToMap(util::StringView name, ETSObjectType
 {
     GetGlobalTypesHolder()->InsertExtensionGetterToMap(name, type, sig);
 }
+
+bool ETSChecker::TypeHasDefaultValue(Type *tp) const
+{
+    return tp->IsBuiltinNumeric() || tp->IsETSBooleanType() || tp->IsETSCharType() ||
+           Relation()->IsSupertypeOf(GlobalETSUndefinedType(), tp);
+}
+
 }  // namespace ark::es2panda::checker
diff --git a/ets2panda/checker/ETSchecker.h b/ets2panda/checker/ETSchecker.h
index 57ef9dcf63abad9e9973d8a0fb6986fd78d5f1bf..0e7c496b133ea77c5751c71fcdb3e77dfb86f1d5 100644
--- a/ets2panda/checker/ETSchecker.h
+++ b/ets2panda/checker/ETSchecker.h
@@ -275,6 +275,8 @@ public:
 
     void VariableTypeFromInitializer(varbinder::Variable *variable, Type *annotationType, Type *initType);
 
+    bool TypeHasDefaultValue(Type *tp) const;
+
     // Type creation
     ByteType *CreateByteType(int8_t value);
     ETSBooleanType *CreateETSBooleanType(bool value);
diff --git a/ets2panda/checker/types/ets/etsFunctionType.cpp b/ets2panda/checker/types/ets/etsFunctionType.cpp
index 1df9fd28eac9bc6271cff13c4bf63277ce2ae0d8..e547f07b47c46541a568264752fbb55cd77cb3c6 100644
--- a/ets2panda/checker/types/ets/etsFunctionType.cpp
+++ b/ets2panda/checker/types/ets/etsFunctionType.cpp
@@ -71,10 +71,18 @@ static ETSObjectType *FunctionTypeToFunctionalInterfaceType(ETSChecker *checker,
     bool isExtensionHack = signature->HasSignatureFlag(SignatureFlags::EXTENSION_FUNCTION);
 
     if (signature->RestVar() != nullptr) {
-        auto *functionN = checker->GlobalBuiltinFunctionType(arity, true)->AsETSObjectType();
+        auto nPosParams = signature->Params().size();
+        auto *functionN = checker->GlobalBuiltinFunctionType(nPosParams, true)->AsETSObjectType();
         auto *substitution = checker->NewSubstitution();
+        for (size_t i = 0; i < nPosParams; i++) {
+            substitution->emplace(functionN->TypeArguments()[i]->AsETSTypeParameter(),
+                                  checker->MaybeBoxType(signature->Params()[i]->TsType()));
+        }
         auto *elementType = checker->GetElementTypeOfArray(signature->RestVar()->TsType());
-        substitution->emplace(functionN->TypeArguments()[0]->AsETSTypeParameter(), checker->MaybeBoxType(elementType));
+        substitution->emplace(functionN->TypeArguments()[nPosParams]->AsETSTypeParameter(),
+                              checker->MaybeBoxType(elementType));
+        substitution->emplace(functionN->TypeArguments()[nPosParams + 1]->AsETSTypeParameter(),
+                              checker->MaybeBoxType(signature->ReturnType()));
         return functionN->Substitute(checker->Relation(), substitution, true, isExtensionHack);
     }
 
diff --git a/ets2panda/compiler/lowering/ets/lambdaLowering.cpp b/ets2panda/compiler/lowering/ets/lambdaLowering.cpp
index fee50e2129dad809a90c9fc3d5bd33213280ad90..cf0ba7b9deb41845d6ce26d116f520ab4d038c1d 100644
--- a/ets2panda/compiler/lowering/ets/lambdaLowering.cpp
+++ b/ets2panda/compiler/lowering/ets/lambdaLowering.cpp
@@ -509,9 +509,13 @@ static ArenaVector<ark::es2panda::ir::Statement *> CreateRestArgumentsArrayReall
     auto *checker = ctx->checker->AsETSChecker();
 
     auto *restParameterType = lciInfo->lambdaSignature->RestVar()->TsType();
+
     auto *restParameterSubstituteType = restParameterType->Substitute(checker->Relation(), lciInfo->substitution);
     bool isFixedArray = restParameterSubstituteType->IsETSArrayType();
     auto *elementType = checker->GetElementTypeOfArray(restParameterSubstituteType);
+    auto *elementTypeWithDefault = checker->TypeHasDefaultValue(elementType)
+                                       ? elementType
+                                       : checker->CreateETSUnionType({elementType, checker->GlobalETSUndefinedType()});
     std::stringstream statements;
     auto restParameterIndex = GenName(allocator).View();
     auto spreadArrIterator = GenName(allocator).View();
@@ -521,7 +525,7 @@ static ArenaVector<ark::es2panda::ir::Statement *> CreateRestArgumentsArrayReall
         statements << "let @@I1: int = 0;";
         if (elementType->IsETSReferenceType()) {
             // NOTE(vpukhov): this is a clear null-safety violation that should be rewitten with a runtime intrinsic
-            statements << "let @@I2: FixedArray<@@T3 | undefined> = new (@@T4 | undefined)[@@I5.length];";
+            statements << "let @@I2: FixedArray<@@T3> = new (@@T4)[@@I5.length];";
         } else {
             statements << "let @@I2: FixedArray<@@T3> = new (@@T4)[@@I5.length];";
         }
@@ -534,8 +538,8 @@ static ArenaVector<ark::es2panda::ir::Statement *> CreateRestArgumentsArrayReall
                    << "    @@I16 = @@I17 + 1;"
                    << "}";
         args = parser->CreateFormattedStatement(
-            statements.str(), restParameterIndex, tmpArray, elementType, elementType, lciInfo->restParameterIdentifier,
-            lciInfo->restArgumentIdentifier, tmpArray, elementType, spreadArrIterator,
+            statements.str(), restParameterIndex, tmpArray, elementTypeWithDefault, elementTypeWithDefault,
+            lciInfo->restParameterIdentifier, lciInfo->restArgumentIdentifier, tmpArray, elementType, spreadArrIterator,
             checker->GlobalETSNullishObjectType(), lciInfo->restParameterIdentifier, lciInfo->restArgumentIdentifier,
             restParameterIndex, spreadArrIterator, elementType, restParameterIndex, restParameterIndex);
     } else {