REUTERS
Ukraine claims it is not able to meet IMF terms for a bailout unless creditors agree to write off 40% of the debt on the sovereign bonds they hold, Reuters reported with reference to the source familiar with the negotiations, according to Ukrainian newspaper Ekonomichna Pravda.
The newspaper said that during a visit to Washington on Wednesday Finance Minister Natalia Yaresko suggested the 40% write-down, or haircut, on the bonds earmarked for restructuring.
"The ministry has calculated that a 40% haircut is needed to hit IMF targets," said a source close to the Finance Ministry.
In turn, another source close to the committee of bondholders describes as incorrect any assumption that such write-off is related to Kyiv’s meeting IMF requirements.
"The IMF requirements do not include, nor necessitate, a haircut," a source close to the committee said.
The committee led by Franklin Templeton and represented by Blackstone has ruled out the possibility of a debt write-off.
The bondholders claim that the restructuring plan, which they proposed, would allow Ukraine to fulfill three main objectives set by the International Monetary Fund as part of a $40 billion bailout.
According to them, the plan will be based on the use of central bank reserves. However, Kyiv is said to object to using its reserves. During the trip to Washington Finance Minister Jaresko gave a series of briefings, warning that at one point Ukraine may be forced to introduce a moratorium on foreign debt payments if the negotiations on restructuring drag on into the summer.
Jaresko is confident that Ukraine will receive a second tranche from the IMF of $1.7 billion in July, even if no deal with its creditors is reached.