The Ukrainian Finance Ministry is meeting with sovereign creditors in the U.S. on Wednesday / Photo from ZN.UA
The Ukrainian Ministry of Finance views a meeting with creditors scheduled for Wednesday, August 12, in the United States as the "final opportunity to reach a full agreement" on debt restructuring.
"This meeting is the final opportunity to reach a full agreement in advance of the September and October eurobond amortizations and next IMF [International Monetary Fund] review now planned for September," the ministry said in a posting on its official website.
Given the legal and timing constraints of reaching and implementing any settlement, failure to reach an agreement at the sovereign level would force Ukraine to implement alternative options for financing its IMF-supported program, according to the report.
As UNIAN reported earlier, Ukrainian Finance Minister Natalie Jaresko is meeting with the ad hoc creditors' committee at their request on Wednesday, August 12, in San Mateo, California, the United States. The meeting will take place in the office of the largest holder of Ukrainian bonds, Franklin Templeton.
Ukraine has been conducting negotiations with the creditors on sovereign debt restructuring since March 2015, discussing extension of maturities and writing-off part of the debt's nominal value, as part of the program with the International Monetary Fund. The measures aim at saving $5.2 billion in debt repayment in 2015 and up to $15.3 billion in the next four years.
After 3.5 months of negotiations, state-run Ukreximbank and Oschadbank have recently agreed with holders of their 2015-2018 loan participation notes worth $1.5 billion and $1.3 billion, respectively, on the re-profiling of the debts. Principal debt repayment was postponed by seven years in exchange to an increase in coupon rates without writing off principal debt.
In June, Ukrainian Finance Minister Natalie Jaresko stated that if there were no progress in talks with the creditors, Ukraine would "theoretically" be in a position to declare a moratorium on sovereign debt repayment in late July, with such right being provided by a law, which came in force on June 17.
Later, Ukrainian officials and the ad hoc creditors' committee issued a joint statement reporting significant progress made in the negotiations and reaching confidentiality arrangements.
On July 24, the Ukrainian Finance Ministry effected $120 million interest payment that came due on that day.
On August 4, Finance Ministry sent a revised proposal on the sovereign and sovereign guaranteed debt to the ad hoc creditors` committee calling them to participate in a high-level meeting in London on August 6. However, the creditors who had previously agreed to write off 5% of the face value of Ukraine's sovereign debt asked to put off the meeting until August 10-11.