The four holders of Ukrainian debt who are negotiating with the
government on a restructuring plan to avoid losses on their
holdings are T. Rowe Price, TCW Group, BTG Pactual Europe and
Franklin Templeton Investments, according to a statement issued by
the group Monday.
The four investors hold about $8.9 billion of Ukraine's
outstanding debt, the group said. They formed a committee in March
to negotiate with Ukraine on a deal that wouldn't involve a
reduction in the value of the bonds they hold.
The group is, however, running against the clock.
The International Monetary Fund, which agreed in March to a
$17.5 billion bailout package for Ukraine to help keep the
country's economy afloat, said it is vital that a deal between the
government and the creditors is completed by mid-June.
The four investors have been sitting on significant paper losses
after a monthslong conflict with Russia put strain on Ukraine's
economy and financial system, causing a steep slide in the value of
the bonds.
The creditors' group, advised by Blackstone Group International
Partners LLP and Weil, Gotshal & Manges LLP, says it has so far
made little progress.
Ashmore Group was part of the initial group but has since pulled
out, according to a person familiar with the matter. The statement
said the committee and its advisers are in regular contact with
additional debtholders who aren't part of the group.
In its statement, the committee said it had provided Ukraine's
finance ministry with a "detailed proposal that the committee
believes meets the objectives of the ministry without any principal
debt reductions and would provide the country with a solid
foundation for economic recovery." It didn't provide further
details of the proposal.
Ukraine, advised by Lazard Ltd. and White & Case LLP, last
week voiced concerns "about the approach taken by the creditors'
committee" as well as "their lack of willingness to engage in
negotiations."
Despite tense negotiations that continued over the weekend, the
two sides remain far apart, according to people familiar with the
matter.
"The two sides are still too far apart to reach a deal by the
June deadline and so a standoff is the most likely outcome,
possibly involving imposition of a debt moratorium by Ukraine,"
said Andrew Matheny, an analyst at Goldman Sachs.
U.S. asset manager Franklin Templeton Investments, which had
about $4 billion of the Ukrainian bonds at the end of December, is
the largest debt holder in the group and is taking a lead role in
the committee, according to a person familiar with the matter.
Write to Chiara Albanese at chiara.albanese@wsj.com
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