Ukraine and its creditors agreed Wednesday to launch good-faith and confidential negotiations on restructuring the country's debt, after weeks of arguing the issue in public.
In a statement following meetings between the two sides at the International Monetary Fund headquarters in Washington, they said they had reached agreement on confidentiality arrangements "that will allow principal-to-principal negotiations on the substance of a possible solution to start next week."
"The parties have agreed to enter such negotiations in good faith, with no preconditions and with the objective of concluding an agreement on the terms of the debt operation as soon as possible," they said.
Creditors, represented by the Ad Hoc Committee of Ukraine's Bondholders -- mainly four US investment and hedge funds -- are under pressure to write off a significant amount of the country's debt to help it balance its finances.
The IMF structured its $17.5 billion bailout program for Ukraine in March on the basis that the country also receives $15.3 billion in debt relief over four years from bond restructuring.
Bondholders say that writing off some of the debt is not necessary and that perhaps just lengthening the payment period would suffice.