Ukraine

The Ukrainian government has registered a package consisting of three draft laws required for the successful finishing the restructuring of the country' foreign commercial debt to the Ukrainian parliament and a draft resolution on the provision of financial stabilization as a part of the implementation of the Extended Fund Facility program (EFF) of the International Monetary Fund (IMF) for Ukraine, according to a posting on the parliament's website, the Ukraine news agency Interfax reported.

The holders of Ukrainian Eurobonds maturing in September and October say they considering the restructuring deal between Ukraine and the group of creditors unfair. They are concerned about the extension of the repayment deadline, RT.com reported. "Our clients consider this approach unfair, because it would defer the average maturity by more than eight years for the existing bonds due 2015 and only half a year for the existing bonds due 2023," Reuters quotes US law firm Shearman & Sterling that represents a group holding bonds issued under UK law.

Ukraine and its main creditors agreed on Thursday to restructure $18 billion of the country’s foreign debt, in a rare deal between bond funds and a wobbly, emerging-market government, the International New York Times reported. If the deal is approved by the Parliament of Ukraine, it would write off 20 percent of the nation’s foreign debt, helping to avoid a drawn-out, Greek-style negotiation with large bondholders. The terms would also offer financial relief to Ukraine during a deep recession and an armed conflict with pro-Russia separatists.

PrivatBank could finally make a breakthrough with its creditors after a minority holdout group of investors that has previously blocked the Ukrainian lender's attempts to restructure its debts said it will agree to the latest set of proposals, Reuters reported. "We will now support this latest consent solicitation," said Daniel Freifeld, founder of Washington-based Callaway Capital Management, an asset manager that heads the creditor committee. The struggles to get the restructuring over the line at the systemically important bank are a microcosm of the challenges facing Ukraine.

Ukraine’s government is nearing a restructuring deal with its creditors that would call for a 20% reduction in the value of the country’s bonds, marking a possible breakthrough in negotiations that have been deadlocked for months, according to people familiar with the matter, The Wall Street Journal reported. Since March, the Ukrainian government has been locked in tense restructuring talks with a group of creditors who hold almost half the country’s outstanding debt.

Ukraine is preparing to meet international creditors in San Francisco this week as the war-torn country warns it is prepared to impose a debt moratorium in September unless a restructuring deal is struck, the Financial Times reported. According to Ukraine’s Ministry of Finance, the meeting on Wednesday represents the last opportunity for the two sides to reach full agreement in advance of a $500m bond due to mature on September 23.

Ukraine’s Eurobonds slid the most in two months as renewed signs of discord between the nation and a Franklin Templeton-led creditor group increased the likelihood of default. The sovereign’s $2.6 billion of debt due July 2017 fell 1.31 cents to 55.44 cents on the dollar at 5:28 p.m. in Kiev, the biggest drop since details emerged on June 11 that Ukraine was asking for a 40 percent writedown on principal.

The United States on Wednesday raised pressure on Ukraine's creditors to strike a deal to restructure the government's debts, with a top U.S. official saying Ukraine's debt burden is "unsustainable". "We urge these creditors to move swiftly in the coming weeks to reach an agreement with the Ukrainian authorities," Nathan Sheets, the Treasury's top official for international affairs, said in an op ed commentary published on broadcaster CNBC's website. Read more.

Ukraine’s bailout faces “significant uncertainty” even if the government is able to secure a debt-restructuring deal, the International Monetary Fund warned Tuesday. The IMF’s comments, made in a report on the fund’s bailout program for Ukraine, come as the finance ministry in Kiev signaled it expected to reach a debt-relief deal this week with creditors, The Wall Street Journal reported.

Bondholders of Ukraine’s third-biggest bank voted in favor of changing terms on $1.3 billion of debt as negotiations continue on restructuring a further $19 billion of sovereign securities, Bloomberg News reported. Creditors of the State Savings Bank of Ukraine, known as AT Oschadbank, agreed to push back maturity dates by seven years and increase coupons on two bonds and a subordinated loan, Chief Executive Officer Andriy Pyshnyi told reporters in Kiev on Monday. More than 90 percent of bondholders were in favor of the new terms.