Weekend Economists Piece for Peace April 3-5, 2015

[Demeter]

9. Ukraine Debt Negotiations a Step Closer as Templeton Forms Group

http://www.bloomberg.com/news/articles/2015-04-01/franklin-templeton-4-ukraine-creditors-said-to-form-committee

Franklin Templeton and four other leading Ukraine creditors have set up a committee to negotiate debt-restructuring terms with a government struggling to avert a default, according to a person close to the talks.

The group is being advised by Blackstone and Weil, Gotshal & Manges LLP, according to the person, who asked not to be identified because the details are private. A representative of Lazard Ltd., which Ukraine hired for the negotiations, declined to comment when contacted by Bloomberg News on Wednesday.

Government bonds rose as the committee’s formation paved the way for talks to start with Ukraine, which needs to reach new terms on 29 bonds and enterprise loans before the next review of a $17.5 billion International Monetary Fund aid agreement at the end of May. Franklin Templeton is the biggest bondholder with about $7 billion, followed by Russia, which bought a $3 billion Eurobond from the country in December 2013.

“Templeton and one or two other big shots should be enough to reach an agreement,” Andreas Rein, a money manager who helps oversee $470 million in assets, including Ukrainian Eurobonds, at Uniqa Capital Markets GmbH in Vienna, said by e-mail. “There is still nothing clear on the $3 billion Russian bond and that still complicates the story.”

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