Azernews.Az

By Bloomberg

Ukraine and its creditors will hold further talks next week after making progress on “substantive issues” regarding the country’s $19 billion restructuring plan.

“Parties have agreed to focus their attention on narrowing the gaps,” they said in a joint statement after meetings in Washington attended by Finance Minister Natalie Jaresko on Wednesday. “Additional meetings between the two sides have been scheduled next week, with the common aim of finalizing the terms of Ukraine’s debt operation as soon as possible.”

The minister joining the debt talks has helped end a two- month deadlock on negotiations as the two sides disagreed on the need for a reduction to bond principal to meet restructuring targets. They agreed to take talks private on July 1, which means creditors, led by Franklin Templeton, can’t trade the bonds. Ukraine’s July 2017 Eurobond rose on Thursday after retreating from the highest level in five months.

“Both parties have begun to realize that time is running out,” Vitaliy Sivach, a Kiev-based bond trader at Investment Capital Ukraine, said by e-mail. “There’s a need to find a win- win solution before the holiday season, otherwise everyone should brace for a possible default in September.”

The $2.6 billion dollar-denominated bond maturing July 2017 rose 0.2 cents to 53.46 cents on the dollar by 10:35 a.m. in Kiev after falling 0.45 cents from the highest level in five months on Wednesday.

The government has asked bondholders to accept a 40 percent reduction to the face-value of the bonds, a person familiar with the matter said last month. Creditors say goals laid out in the country’s $40 billion International Monetary Fund aid package can be met by lowering coupons and extending maturities alone.