WASHINGTON, June 19 Ukraine is holding talks
with creditors on restructuring its foreign currency debts, an
official from an international finance association said on
Thursday following recent meetings with Ukrainian officials.
Lubomir Mitov, an economist with the Institute of
International Finance, said that while Ukraine's finances were
precarious, it was too soon to say whether it would need to
change the terms of its debt.
Mitov said Ukrainian officials stressed they would avoid
forcing any so-called haircuts on bondholders in a
"The Ukrainians authorities made very clear to us that they
would consider this only as a really, truly voluntary operation
agreed by the bondholders," Mitov told journalists by phone.
"A voluntary exchange or maturity extension could be one of the
sources for financing."
The IIF, a trade group for international finance, said Mitov
had recently visited Ukraine.
Ukraine's economy is under severe pressure as the country
struggles from what Russian President Vladimir Putin has
described as a civil war. Militants in Eastern Ukraine are
fighting for secession from the country.
Mitov said Ukraine is already in a deep recession that could
shrink gross domestic product, a measure of total economic
output, by 8-10 percent.
Still, he said Ukraine's public finances will not be poor
enough to necessitate a debt restructuring deal until at least
next year. And even then, Kiev might not need a restructuring if
it is able to return to capital markets to raise money, Mitov
"Nothing is decided yet but we know they are having some
talks, preliminary talks, on this," Mitov said.
(Reporting by Jason Lange; Editing by Andrea Ricci)